Sydney-founded freelance jobs marketplace Airtasker has raised $33 million from existing shareholders to fuel the establishment of its London operations and tackle the lucrative UK gig economy.
Founded in 2012 by Jonathan Lui and Tim Fung, Airtasker provides a platform for on-demand workers to post and accept jobs, and Fung says its user base and transaction volume has doubled this year to sit at 1.7 million community members and $90 million in task-transactions processed through the platform.
This Series C raise is one of the largest capital raises by an Australian startup this year, and the fourth funding round the company has closed since 2013, after raising $22 million in Series B funding mid-2016. This round was led by Airtasker’s current major shareholders, including Seven West Media, Exto Partners, Morning Crest Capital, Black Sheep Capital and Skyfield Capital.
Fung says while Airtasker “didn’t set out to raise as much as we did” after strong support from investors, the team decided to increase the size of this funding round to $33 million.
“We thought it was good to take on the extra fuel to fuel our mission,” he tells StartupSmart.
Fung says Airtasker will use these funds in three main areas: expanding its customer support efforts; hiring more talent in its product and engineering teams; and launching its offerings in London, where it has already appointed the aptly-named Lucas London as its UK country manager.
The cash injection comes off the back of a big year for Airtasker, after it partnered with insurance startup ROOBYX to offer income protection to its workforce, adopted Australia Post’s Digital iD technology, and partnered with furniture giant IKEA to pair Airtasker workers with consumers seeking help assembling their flat-packed Swedish goods.
Airtasker co-founder Jonathan Lui, who stepped down from the company last year for personal reasons, has had a similarly packed year after moving to Singapore and launching Soho, which he describes as the “LinkedIn for property”.
Launching in new markets: An Airtasker how-to
For Fung, however, it wasn’t the potential size of the market that most enticed him to expand to London, but rather the cultural fit and existing gap in the market that could be filled.
“We always start with a bottom up approach — we don’t like to think too much about market shares or other macro factors,” Fung says.
“We like to think how are we going to get our first thousand customers.”
When looking to expand into new markets, Fung advises other startups should consider whether a new location is a good cultural fit for the company, and whether a new market has a niche waiting to be filled.
“When we expanded we looked at consumer attitudes to hiring local services [through a gig-economy model] and saw anecdotally there are quite a few similarities in culture,” Fung says.
Fung describes the UK as “a really large and exciting market” but says “surprisingly there’s nothing similar to Airtasker in the UK”.
The startup is now building out its London team, hiring marketing, local operations, support and insurance staff, which will join Airtasker’s current team of 70 in Australia and 50 in Manila.
While Airtasker is focusing on building out its London team, Fung says the startup “definitely has global ambitions in the future” and is looking to expand quickly into new markets.
“What we achieved in three-and-a-half years in Australia we are trying to do in nine months [in London],” says Fung, who says Airtasker will be taking what it’s learnt from launching in the Australian market and appling to its London operations.
“Jump in hard and fight your way out of it”
While Airtasker has raised considerable funding over its lifetime, Fung says having capital does not necessarily prepare startups for the trials and lessons of launching in new markets.
“You’re never going to feel ready; even after raising capital we certainly don’t feel that we are in any way ready or that it’s going to be easy,” he says.
“I think that we are certainly going to be jumping off a cliff and learning to fly on the way down.”
This shouldn’t deter startups who have international ambitions, however, and Fung says investing in building local teams and engaging with the local population is crucial to a successful expansion.
“I think you definitely need to be prepared to invest in localisation [and] having people to engage with over there,” he says.
“Think about any new endeavour as, ‘jump in hard and fight your way out of it’.”