Thumbtack, an Online Market for Services, Raises $100M

Thumbtack really saved my former Condo association.

Last August, the condo association signed 1 year contract with a property management firm. 6 months into the contract they suddenly gave us their 3 month termination notice. Apparently due to the co-owners divorcing.

As soon as we got the termination notice we started searching on Angies List and Google for other property management firms. The search was not that fruitful.

Came across Thumbtack, entered in our data. Like magic we got 2 solid leads. Interviewed both companies, both were good, but we ended up choosing one of those companies. Both of the companies were better than the companies we interviewed last year; and we got leads for those through references and Google.

I have used both Thumbtack and AngiesList for finding contractors for our house. The quality and professionalism of the contractors from AngiesList is far and away better than those who submitted bids from my Thumbtack post.

I imagine they think they're going to use the money to drive local contractor adoption, but that's a hell of a lot of money for that.

I wonder if this investment by Google Capital signals upcoming legal/regulatory challenges for Google Corp. In theory Google Local should be able to upend the Thumbtack business model by driving significant organic search traffic directly to local businesses.

Google bought Zagat to go head to head with Yelp and now gives Zagat reviewed restaurants premium search placement atop a ticker. Why not follow the same strategy for local services?

I find it interesting that the one company that can do the most damage to Thumbtack puts ~$100m into the company.

I'm amazed at the number of companies that I have never heard of doing massive funding rounds. As for this one, it seems like a good idea (I tried something very similar and failed miserably with it) but they are obviously better at executing it than I was....

" It says it operates in all 50 states and sends roughly $1.8 billion of business annually to more than 75,000 professionals."

Congrats to Marco and the Thumbtack team!

(I invested in their original seed round.)

Congrats to Marco and team - they busted their ass in a tough market, stuck with it for years when no one gave a rat's ass about them and are now flying high.

Congrats!

Some of these tech investments boggle my mind. Not because of the actual valuation but because of the responsibility of spending $100M wisely and getting at least a $300M return. It's an immense amount of pressure to put on an organization. I guess I can understand it in this case, where network effects will be the key to success and marketing can get them there. But wow, talk about a huge risk.

Has anybody ever had a good experience with Thumbtack (or Homeadvisor)? Every time I've tried it, I've only gotten vague bids (since they can't see my house until I connect through the platform), and it seems all of their contractors are desperate for work. They seem to be the types of handymen that are doing this as a side gig.

David Lawee, General Partner at Google Capital, says in the press release. "The bigger story, however, is the potential for small businesses: Thumbtack has a real opportunity to transform how local professionals find new customers."

This sounds a lot like how Groupon was going to revolutionize advertising for local businesses.

130m for what? Insanity.

I'm sorry, but I'm just not buying into this business model. Trying to do everything at once and doing nothing well at all.

Just look at their services directory:

http://www.thumbtack.com/more-services

My friends who are DJ's and hair stylists hate these kinds of services with a passion. People like to deal with people directly and operate on referrals in most of these industries.