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Aussie start-up in $1.5m funding win just two months after launch

Date

James Manning

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Airtasker's new offices, painted by art crew 'Sillier than Sally', who accepted the job on the Airtasker website.

Airtasker's new offices, painted by art crew 'Sillier than Sally', who accepted the job on the Airtasker website.

An Aussie start-up launched recently as an online errands and chores marketplace has been granted $1.5 million in funding.

The website, Airtasker, was launched in February and allows users to outsource everyday tasks to other members (dubbed "Runners") for cash.

The tasks range from the mundane, such as data entry and cleaning, to the outrageous, such as pretending to be someone's girlfriend. The Airtasker team have even commissioned their own tasks, cashing in on Apple's publicity by paying a man $950 to camp out to buy the first new iPad. They also hired a team of artists via their website to decorate their new offices.

Start-up success ... Jonathan Lui, left, and Tim Fung of Airtasker.

Start-up success ... Jonathan Lui, left, and Tim Fung of Airtasker.

"We wanted to make our business model a win-win for everyone in the community," says founder and CEO Tim Fung of Sydney.

He came up with the idea last year while trying (and failing) to assemble IKEA furniture. He took the idea to investors with co-founder Jonathan Lui and was able to raise enough money to build the website and get the marketplace up and running.

The pair previously worked together at mobile start-up Amaysim, where Fung helped raise over $30 million to get the organisation off the ground. The boost in funding comes as a result of the relationships the pair forged with investors at Amaysim, such as BridgeLane Capital, says Fung.

The company is based on the idea of collaborative consumption, whereby community members share resources directly with each other, cutting out the middle man and in theory reducing the cost.

Airtasker charges a fee of $2 plus five per cent of the task's value to the Runner once they complete a task. However, there is no fee for the user posting the task, both before and after the task is completed.

"We're totally aligned with our community members as we only ever make money when they make money," says Fung.

But this may be a weak point in the company's business model, according to some commentators.

"This is a very tough business model to build a business with," says Matt Barrie, CEO of Freelancer.com.

"The problem is that there's no global liquidity in the market. To build a dog walking market in Parramatta, you need someone who can walk a dog in Parramatta, and someone who owns a dog in Parramatta. Neither help the Geelong dog walking marketplace.

"If you want to make $1 million in revenue and you're taking a 10 per cent commission, that's $10 million of dog walking you need to do through your marketplace. That's a lot of dogs."

Despite this, Airtasker has seen steady growth since its launch, listing over $30,000 worth of jobs in its first seven weeks.

"We're only looking at ways of making money at the moment which would add value to our customers," says Fung.

The company plans to use the $1.5 million to hire engineers to bolster the website's functionality with the addition of premium user profiles and an iPhone app that launched today (an Android app is in the works).

There will also be extra safety features introduced, such as identity checks and one-on-one interviews that will earn users verification badges on their profiles.

"Continuous and swift expansion of our capabilities and audience are the two highest priorities for us right now," says Fung.

"If we keep our users happy, then we know the community will continue to grow, as word-of-mouth has fuelled our growth to-date".

51 comments so far

  • Who gave them the $1.5M, their Fairy Godmother???? That's the point of the story surely and it's NOT DISCLOSED!!! DOH!!

    Commenter
    Cornucopia
    Location
    GC
    Date and time
    April 19, 2012, 9:49AM
    • Why on earth would an investor what it's name plastered all over the internet? Can you imagine the number of beggars at the door saying their widget needs help? Investors need a controlled supply of investment advice not a flood of low quality gunk.

      Commenter
      Wayfarer
      Location
      Sydney
      Date and time
      April 19, 2012, 10:53AM
    • Absolutely right Cornucopia. The flashy headline using the words '$1.5m funding WIN" lead me to read this article. Further along are the words "GRANTED $1.5m in funding"
      But the whole point of the story is not disclosed. Makes me think the source of the funding is - our money!!. And with all this cash what's the first thing they do with it? They pay a guy almost $1,000 to camp out on a footpath.
      Nice work if you can get it.

      Commenter
      robespierre
      Date and time
      April 19, 2012, 11:32AM
    • who cares - they had an idea and did something

      Commenter
      Ulrich Schild
      Location
      Sydney
      Date and time
      April 19, 2012, 7:25PM
  • So basically these guys have been given money to help- perpetuate people's laziness for a fee?
    Wow, what a society we live in!

    Commenter
    the other stevo
    Location
    sydney cbd
    Date and time
    April 19, 2012, 9:54AM
    • Its not about laziness but about efficiency.

      I can clean my own house or car, I can mow my own lawn and I can do my own shopping. Or I could pay someone to do it and use the time I save to generate more income from my highly paid job. Just makes sense. We do it professionally so why not in our personal life. That's why you don't see high court judges typing letters or neurosurgeons wheeling patients around hospitals.

      I think this site sounds great- will check it out!

      Commenter
      Dr Geoff
      Date and time
      April 19, 2012, 7:19PM
  • "He came up with the idea last year while trying (and failing) to assemble IKEA furniture."

    ....or he implemented Taskrabbit in Australia (founded in the US in 2008). From taskrabbit website:

    "TaskRabbits are your own personal assistants cleaning your home, delivering groceries, running errands, BUILDING IKEA FURNITURE, and so much more."

    Commenter
    Junior
    Location
    Melbourne
    Date and time
    April 19, 2012, 10:00AM
    • This business model has been by successfully executed by TaskRabbit in the US... nice to see the concept being tried in Australia.

      Not sure how legit this quote is though - "He came up with the idea last year while trying to assemble IKEA furniture"- as the website and business model look far too similar to TaskRabbit to be claimed as an original 'idea'.

      Commenter
      EvanClark
      Date and time
      April 19, 2012, 10:10AM
      • Congratulations Airtaskers ! Wish you all the very best ! Take no notice of those who criticize you because you guys chose to do something and make it successful !

        Commenter
        Vibgyor241
        Location
        Sydney
        Date and time
        April 19, 2012, 10:12AM
        • Seems to me that they're providing for legitimate income for people who have the time to run errands and saving time for those who can afford to have errands run.

          GREAT IDEA in an Australian marketplace where the idea didn't exist before.

          Commenter
          rahulschauhan
          Location
          Melbourne
          Date and time
          April 19, 2012, 10:19AM

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