Last week, Thumbtack, an online services marketplace, raised $100 million from Google Capital, a VC group at the search giant. This brings the total investment in Thumbtack up to $150 million, with participation in this round by Tiger Global Management, Sequoia Capital and Javelin Venture Partners.
Thumbtack was started in 2009, and serves as a marketplace for individuals or businesses find professional freelancers in their area, like photographers, gardeners, chefs, or movers. The company is operating in all 50 states of the US and sends more than $1.8 billion to over 75,000 freelancers.
Thumbtack is part of the rising tide around networked marketplace platforms, or what I call placeforms. Like Airbnb, Uber, and eLance, Thumbtack makes a market where buyers and sellers can meet and exchange services for money. In essence they make an existing marketplace more liquid, better managed, and more transparent.
Thumbtack — like almost all placeforms — provides detailed profile information for the professionals it brokers so that buyers are able to make more informed decisions about the caterer they hire to create a memorable wedding day. They can solicit bids from providers and read customer reviews.
There is no doubt that placeforms are becoming the normal way to find help. The ease of use is a major consideration. For example, consider trying to get a number of quotes from house painters. Without a tool like Thumbtack, you’d have to find and contact some painters, extract quotes, send them specifications. However, using Thumbtack, the user just selects exterior painting from a list of services, fills in a form with specs, and then hits send.
Later on, painters would be sending proposals to your email address, and you could negotiate a deal, and get your house painted. The professionals pay at the point of sending a quote, which is how Thumbtack makes money, like competitor, like NeedTo, Zaask, or Workstir.
This funding round for Thumbtack is just the newest news blip in what is going to be one of the major threads of the next few years. I expect that nearly every niche that can be reached by a placeform will be. Some — like Thumbtack may be more general, offering many service providers for a wide range of tasks. Others may be more specialized, like a placeform for software developers, which might be integrated with software testing tools.
I was surprised to see that Thumbtack does not have a social dimension, and in particular, the angle of seeing professionals that my friends recommend. Perhaps it’s just too early, and not enough people have signed up for that to make a difference. I expect that to be a growth area, and just as important as having a mobile client (which they do have).