Aussie start-up in $1.5m funding win just two months after launch
Start-up success ... Jonathan Lui, left, and Tim Fung of Airtasker.
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.
Word-of-mouth has fuelled our growth to-date.
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.
Airtasker's new offices, painted by art crew 'Sillier than Sally', who accepted the job on the Airtasker website.
"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".