oDesk Announces $8M Funding from Benchmark
Nik Cubrilovic
16 comments »
oDesk is a Menlo Park-based company that offers a marketplace for contract talent, primarily in the programming services field. We first wrote about oDesk only a few weeks ago, and since then they have experienced strong growth with a rise in the number of projects and suppliers. Today oDesk have announced an $8 Million Series B investment lead by Benchmark Capital, the respectable Silicon Valley firm that has previously backed companies such as eBay, Handspring, RedHat and Juniper. All of oDesk’s previous investors have also taken part in this round, which will see Kevin Harvey of Benchmark join the oDesk board of directors.
At the recent Future of Web Apps conference in San Francisco, Michael Arrington (the editor of Techcrunch) listed oDesk amongst a group of companies that are ‘ones to watch’. We have watched oDesk grow strongly in a space that was previously heavily dominated by both eLance and Guru. oDesk offers a twist on the old model in a market that is desperate for high-quality development and other IT services. oDesk allows it’s customers to track every aspect of projects and jobs that they post to the marketplace, from sourcing the right talent through to managing your relationships with suppliers. It also have a different economic model as all work is charged on an hourly basis rather than a fixed project cost found on other sites.
We are bullish about oDesk’s prospects, not only because of the rising demand for good providers but also because of their approach to connecting and managing the relationship between providers and customers. As indicated in comments in our previous post, and in our own experience, oDesk seems to be loved by both the providers of services as well as it’s customers, and both parties seem to stick to using the service. With Benchmark now putting it’s chips down on oDesk, the service should power ahead even further and become a dominant player. oDesk have said that the funds raised from the Series B will be used to expand marketing activities and to spur growth, it seems that they have the platform right, it is working well for all participants and now it’s time to open the floodgates.
Anyone want to create a startup today?
Ovecast: Count me in. What’s you idea?
It’s “its” not “it’s.”
it was hard to sign up, i kept having to retype the code and re-entery my resume.
i don’t think it’ll work though…
Money is being tossed around like it’s 1996 again!
Listen to my prediction on the 7 Minutes with Rex Dixon 9/25/2006 podcast… who knows? I may be right!
I think it is a bit absurd though - $8 million for a freakin’ consulting firm!
Rex
Technically Speaking (blog) - http://rexdixon.wordpress.com/
7 Minutes with Rex Dixon - (cyberears.com) - http://www.cyberears.com/index.php/Show/audio/157
7 Minutes with Rex Dixon - (clickcaster.com) - http://www.clickcaster.com/rex-dixon
Well… http://RentACoder.com - works for years already and they definitely rocks. Nothing to say about primitive oDesk except of a lot of noise they make around. And I have big doubts about effectiveness of their ‘hourly rate model’
I’m not sure how you can be bullish Nik…theres more competition out there than eLance and Guru…personally I outsource my personal projects I need help with at Scriptlance. Also I’m not particularly fond of the hourly charging model, I’d much rather work to a set fee so I know what I’m up for from the start, after all what’s to stop a contracter saying it took them 20 hours when it really took them 5, and certainly I know from others who use similar services that they also prefer the fixed quote.
OnForce.com Model is Best for IT services
Best of luck to oDesk, but i’m not convinced that this per hour/micromanagement approach will lure truly talented contractors. There is much that can be done to enhance the utilisation of the growing body of freelance operators out there, from both a supply and demand perspective., but this is not it.In the short term the high level of demand may support interest in this model but its too ’sweat shop’ for mine ……wont go the distance.
Michael,
I don’t understand why you’re so bullish about this start-up. I have been active in b2b marketplaces for several years (not in the US, in the EU only) with http://www.bobex.com, and oDesk just seems to me another player in the very competitive US market. I’m not sure they can beat the incumbent players like elance, guru, rentacoder, etc. What is their UPS? All the features you metion are available on those sites too? Anyway, I really enjoy your blog!
oDesk model can not compete against the more efficient models of Elance (TechCrunch can’t spell their name correctly), Guru and RentAcoder. Buyers want to know what they are going to spend to get a project done. Those with large budgets and larger projects will develop direct relationships for longer term outsourcing relationships. Lastly, oDesk charges twice as much as any of these competitors. Disintermediation is a constant problem and at twice the normal rates charged by others they will be taken advantage of.
I also like to check how many VP’s a startup can pile into a little company and at six oDesk didn’t disappoint. It’s a top heavy company that will burn through cash like the good old days. oDesks alexa statistics don’t support the rosy picture painted as well. But hey go ahead and open the floodgates!
I myself attempted to launch a professional services/contractor marketplace around the time of the dotcom bubble burst and as one might imagine funding for such models was not available probably due to maket conditions, lack of market maturity, and maybe most importantly my personal lack of access to the funding sources. But, it’s interesting to see the attention these service provider networks are now receiving and it would seem that there should be room for a number of them to succeed as relationships are established. Our site still exists although now it’s a static directory http://www.MyPro.com It’s the perfect name for such a marketplace, maybe now that oDesk is flush with cash they’d like to change their name.
2 Rusy: it’s not about name actually, it’s all about business model they use and the infrastructure they have. I won’t use oDesk for my projects in the nearest future for sure.
Interesting points about the subj. can be found here: http://blog.auinteractive.com/.....r-vs-odesk
And I like this list too:
http://answers.google.com/answ.....?id=747577
Michael, hope to see oDesk in the comming Business 2.0 issues, in Hits & Misses
Guess in what part of it?! LOL