–Another Online Work Arrangement Platform IPOs

On Friday, Waltham MA-based, an online personal services marketplace platform, completed its IPO on the New York Stock Exchange. On the first day of trading, the share price rose from $17 to over $24, registering a market capitalization of more than $700 million. Investor confidence is certainly running high for an online work arrangement intermediation platform business that — like companies like oDesk, Elance, and — has gone from few subscribers to millions around the world since 2006.

The IPO Prospectus can be downloaded at the Investor Relations page, but here are a few summarizing facts about the company and transaction published in a Boston Globe article:

  • is an online marketplace for personal care services, ranging from baby-sitting and elder care to dog walking. About 5.2 million families and 4.5 million caregivers worldwide are registered with; about 1 million paying subscribers have used it to find qualified care providers in their neighborhoods.
  • was founded in 2006 and has raised $111 million in venture funding from several firms, including Matrix Partners and Trinity Ventures. The company has yet to turn a profit, but posted revenue of $48.5 million in 2012 and $59 million for the first nine months of 2013.
  • The offering gives a market capitalization of $723 million. The company’s shares were priced Thursday night at $17, and raised about $91 million from the sale. made three acquisitions in 2012 and a fourth last year has grown outside of the US, mainly by acquisition, and now operates in 16 different countries, including most of Western Europe. Its market is a large and growing one (on which SIA recently reported will double by 2022; see Staffing to the Home Healthcare Industry).

Unlike a staffing firm, the company’s revenues are mainly subscription revenues paid monthly—there is no percent transaction fee (Basic Subscription are $35/month or $147/year). There are also Premium Subscriptions, with more services (just like on LinkedIn). Naturally, there are also other fees for other optional services. is still predominantly a consumer-oriented platform today (connecting families and service providers). But as I wrote about it in early 2013 (’s New Online Recruiting Platform. Why should we care?), the business was not “staying put.”

By the time I had written that post, the company was already selling its platform services to enterprise organizations who in turn made them available to their employees as an “employee benefit” (employees could use the platform for free to find the service providers their families needed). In addition, had just launched a Recruiting offering for “home care firms” (the service businesses that provide caregivers directly to local families—much like staffing firms). Clearly, by rapidly expanding work segments and introducing new offerings to businesses, not just consumers, has been demonstrating the agility that digital platform-based business can achieve.

So, one may say “All well and good— may be serving consumers and now businesses, but it’s still just a service provider matching and vetting service. Unlike an online staffing platform, is not involved in the billing and payment part of the work arrangement. But this is no longer the case, as this new offering, HomePaySM, indicates:

When you hire someone to perform services in your home and you have control over how the work is performed, the IRS deems you a household employer. If your employee earns more than $1,800 a year from you, you have certain tax and compliance obligations as their employer. HomePaySM… handles these obligations for thousands of busy families. The largest comprehensive household payroll, tax and compliance service in the U.S., the HomePay team facilitates the management of a family’s financial relationship with a caregiver and also enables a caregiver to establish the compliance framework to qualify for important household employee benefits.

So now, not only offers a billing and payment service, but compliance guidance as well. And it starts to look like is using its platform to control and service the end-to-end relationship between families “in need” and caregivers.

As I said a year ago, is a work arrangement intermediation platform that should be followed with great interest—not because it is encroaching on a core staffing market—but because in a peripheral staffing market (one that will grow enormously), it is showing how staffing can be done differently.

I am not sure of how “home care firms” (and staffing firms that might supply them) feel about it. But investors seem to like it so far.


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