Thumbtack, a marketplace for local service providers, has raised a $12.5 million Series B led by Sequoia Capital.
When co-founder and CEO Marco Zappacosta told me about the funding, he said he’s excited because Sequoia is “focused on building enduring, meaningful brands,” and it’s “making us their bet” in the local services market. Sequoia’s Bryan Schreier is joining Thumbtack’s board of directors, so I asked him via email why he picked Thumbtack.
“Meeting the Thumbtack team opened our eyes to the fact that the elusive reinvention of local is about a software service – not a list,” Schreier said. “We are blown away by the technology, operations, and business model Marco, Jonathan [Swanson] and Dan [Birken] have developed.”
Zappacosta similarly suggested that the Thumbtack model is distinctive and uniquely appealing to both consumers and service providers. Consumers describe what they’re looking for, then Thumbtack allows service providers to bid on the job. So the consumer gets multiple quotes within 24 hours without having to do a bunch of searching, browsing and calling. And Zappacosta said the service providers are only paying Thumbtack that they’re actually interested in bidding for a job — “We’re delivering them a lead and giving them total discretion over whether they want to pay for that.”
There are now more than 250,000 service providers in all 50 U.S. states on Thumbtack, and 20,000 of them are paying the company each month. The site is connecting those providers with $300 million worth of annualized service requests, Zappacosta said — and that’s without a sales and marketing team. (He admitted that Thumbtack “hasn’t built our brand as well as some of the other players,” something that could start changing thanks to the funding, but he doesn’t want things to change too dramatically: “We don’t want to have a Groupon-style salesforce.”) Some of the more popular requests involve cleaning, event services, and home improvement and maintenance.
Zappacosta said he doesn’t currently have any plans for international expansion. He argued that “the upside is basically unbounded” just by growing in the United States.
Thumbtack has now raised a total of $18.2 million in funding. Previous investors Javelin Venture Partners and MHS Capital also participated in the round.