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+ Odd-jobs matchmaker Thumbtack gets big funds, joins unicorn club
+ + + + + September 30, 2015 + Updated: October 1, 2015 4:18pm + +
San Francisco’s Thumbtack, which introduces fix-it folks, caterers, yoga teachers and other professionals to people who need them, vaulted into the unicorn club this week after a $125 million funding round put its valuation at $1.3 billion.
+“Our vision is to replace and reimagine a big chunk of the Yellow Pages,” said CEO Marco Zappacosta, who co-founded Thumbtack in 2009 after what he called a “banal observation: Why is it so damn hard to find a plumber?”
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Thumbtack lets customers describe a job — anything from painting a house to walking a dog — with lots of specifics, including location, timing and budget. It sends those leads to service providers, who pay from $3 to $20 for the customer’s contact information so they can follow up with a quote. Each project can receive up to five quotes. “We’re more like a dating app than a traditional e-commerce site,” Zappacosta said.
+ + + + + +After the initial introduction, Thumbtack bows out of the relationship, although at some point it might add optional back-end services such as a scheduling platform and payment system, he said.
+The site facilitates more than 5 million projects a year, averaging about $500 each. Home improvement, Thumbtack’s biggest category, is a lucrative and highly fragmented market worth well over $500 million annually in the United States. It lists 200,000 professionals in 1,500 categories, including electricians, plumbers, painters, personal trainers, interior designers, gardeners, DJs, tutors, coaches, florists and makeup artists. Zappacosta once offered Italian cooking lessons and catering via the site, which he said was invaluable in learning a service pro’s perspective.
+“Thumbtack sends us exactly what customers are looking for,” said Geraldine Chiaramonte, who runs Bay Area Candy Buffet, providing sweet treats for weddings and other occasions. Once she sees the requests, she decides whether to pay $3 per lead to follow up with a proposal. Up to a third of her business now comes from Thumbtack, after three years on the site.
+A good analogy for what Thumbtack does is the Internet itself, said Bryan Schreier, a partner at Sequoia, which invested in Thumbtack’s current round and three prior ones. “There was a ton of information online, but it took Google to actually make that information useful and make it easier to connect consumers with what they were looking for,” he said. “This is a similar approach to solving a very big problem.”
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So could Thumbtack grow as big as Google? “I don’t want to sound too over-the-top, but the local services market is much larger than the online advertising market,” Schreier said. “Thumbtack is a very large business already, when the reality is that they are tapping less than 1 percent of the available market today.”
+That market’s gargantuan size has lured behemoths, with both Amazon and Google experimenting with their own home-repairs offerings. Google Capital is also an investor in Thumbtack, having led a $100 million round last year, as well as participating in the current round.
+The latest funding brings Thumbtack’s total backing to $273.2 million. It was led by Scottish investment firm Baillie Gifford with several existing investors participating. Zappacosta said the money will go toward improving the product and marketing the brand. Thumbtack has 134 employees in San Francisco and 240 in Salt Lake City, where its customer service is based.
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Some rivals such as TaskRabbit act as middlemen, arranging each service call in exchange for a cut. That model — like that of Uber, Lyft, Postmates and other gig economy services — has stirred up huge controversy about whether the independent-contractor workers should be reclassified as employees. That’s not an issue for Thumbtack, since it operates as a referral service.
+Zappacosta said its less-controversial status drew Republican presidential candidate Jeb Bush, who rode in an Uber to Thumbtack for a heavily publicized campaign stop in July, shortly after Democratic front-runner Hillary Rodham Clinton criticized the gig economy’s lack of worker protections.
+“We are unambiguously a force to empower business owners, not try to replace them,” Zappacosta said. “Jeb was trying to align with pro-business sentiment.”
+ +Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com Twitter: @csaid
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