Thumbtack, a local services marketplace that matches consumers with professionals like plumbers and yoga teachers, has raised $150 million in a funding round and has a valuation of around $1.7 billion.
Sequoia is leading the funding round, according to a report in TechCrunch.
In a blog post, company Co-Founder and CEO Marco Zappacosta detailed the challenges the company faced during its rapid growth period, back when it started as a simple marketplace.
“The old version of Thumbtack was manual. A customer came in and filled out a form for what they needed, then five pros could send quotes. It was first come, first served, and pros would pay per quote,” Zappacosta said. “Its power came from the fact that every quote was handcrafted by a pro just for you. But sometimes the process took minutes. Sometimes it took days. Sometimes the pros who responded fastest were the best fit for the job. Sometimes they weren’t. The business was growing fast, but we knew that its latency and inconsistency would forever limit its potential.”
The site was extremely popular but there were issues with scaling and a lot of problems associated with the growth.
“We took a business that was growing more than 80 percent year over year and we pressed pause,” Zappacosta said.
The company made changes. Zappacosta said it “started from scratch on our product, taking it from a digital bulletin board to an instant matching mobile experience unique in the local services marketplace.”
The company auto-generates quotes now, based on a person’s needs and also location. Because customers can get quotes in minutes, it said it didn’t seem right to charge a professional for every quote sent. So, the professionals pay Thumbtack a fee when a customer picks them.
“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.
The Wall Street Journal is reporting that this might be Thumbtack’s last funding round before it goes public.
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