Thumbtack raises $150 million for its local services marketplace
Thumbtack just closed a new funding round of $150 million. Sequoia is leading the round, and the company is now valued at $1.7 billion. TechCrunch’s Kate Clark previously reported that the startup was raising again, but that it was a tough process.
In a candid blog post, co-founder and CEO Marco Zappacosta admits that the company faced multiple challenges. Thumbtack started as a simple marketplace for local professionals.
Clients could post a message saying that they were looking for carpenters, wedding planners or house cleaning services. Professionals then scrolled through listings and sent quotes. Customers eventually picked a professional.
While it was a huge hit, it didn’t scale well and created a ton of issues. “We took a business that was growing more than 80% year over year and we pressed pause,” Zappacosta wrote.
The startup rewrote the back end, created a new front end, pivoted to a new business model and essentially created a new product.
Thumbtack now automatically generates quotes based on your needs and your location. Given that you can get quotes in a few minutes, it didn’t make sense to charge professionals every time they send a quote. Now, professionals pay Thumbtack a small fee when customers contact them after a quote.
“Now growth has reaccelerated dramatically, and we have the runway to make Thumbtack the only platform they need to find the right customers,” Zappacosta wrote.
So it sounds like Thumbtack has seen the light at the end of the tunnel. With today’s new funding round, the company can now focus on attracting service providers again. According to the Wall Street Journal, this could be the last funding round before Thumbtack files to go public.