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Seven West Media lead investor as Airtasker raises $22 million

Paul Smith
Paul SmithTechnology editor
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Online job outsourcing marketplace Airtasker has closed one of the biggest Australian start-up fundraising rounds of the year, securing $22 million in a round led by Seven West Media.

The online marketplace, which enables people to pay others to perform odd jobs, as well as professional tasks, has significantly increased its financial clout, following its last funding injection in May 2015, when it pocketed a $6.5 million round.

It has now raised a total of $32 million since it was founded in 2012 by former Macquarie Group analyst Tim Fung, who is its chief executive, and Jonathan Lui, who is chief operating officer.

Market opportunity: Seven West chief executive Tim Worner with Airtasker’s Tim Fung and Jonathan Lui. Ben Rushton

The round is the latest in a string of recent start-up funding deals, and shows an increasing propensity for Australian start-ups to land significantly sized rounds, after online wine seller Vinomofo secured a $25 million investment from Blue Sky Venture Capital in April.

Existing investors from the earlier round including Shanghai-based Morning Crest Capital, Sydney-based VC fund Exto Partners and National Road and Motorists Association (NRMA) have also raised their stakes in the company.

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Attracting Seven West

However it is the decision by Seven West to buy into the start-up that will cause most interest, with the media group now owning 15 per cent of Airtasker.

Mr Fung told The Australian Financial Review the additional funds were needed to both hire more staff to develop its technology and to increase its marketing efforts.

The company intends to dramatically raise its profile in a bid to become a household name in Australia, something it believes Seven West can help with, due to its multiple media channels.

"We are trying to build a mainstream consumer brand in Australia, so certainly trying to reach a bigger audience of people that can use our product," Mr Fung said.

Airtasker's round shows an increasing propensity for Australian startups to land significantly sized rounds, after online wine seller Vinomofo secured a $25 million investment in April. Wayne Taylor

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"We have been talking to Seven West Media since mid-2015 when they reached out and started the relationship ... and first of all they had to decide if we were actually 'a thing', so once they decided we are – which was nice validation – we spoke more and realised the benefits that they can bring to us."

As part of the deal Seven West's sales director Jenny Hosie will take a seat on Airtasker's board.

She will be joined by the founder and CEO of Australia's fourth largest telecommunications company James Spenceley, who is an existing investor in the company.

Significant market opportunity

In the online world Seven West also has a 50 per cent interest in Yahoo!7 and is in a joint venture with Foxtel, running the TV streaming service Presto.

Tim Fung said he had closely watched the impressive IPO of fellow Australian online marketplace Redbubble in May. Ben Rushton

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Seven West chief executive Tim Worner said his company was continuing a strategy of investing in early stage businesses, which it believed it could help grow through its own media assets.

He said he believed Airtasker had a significant market opportunity ahead of it, and that it was already working with Seven West's internal branded content division RED Engine TV on opportunities to amplify its growth.

"With the power of promotion of Seven West Media's assets behind them, we know we can do a lot for Airtasker," Mr Worner said.

"We have been very active and opportunistic in the market, identifying businesses which we believe have viable disruptive businesses models, high quality management teams, and operate in markets that have a large market opportunity. We have over 10 companies in our portfolio and several others that are currently under consideration."

Airtasker will bide its time before following fellow jobs marketplace Freelancer.com on to the public market. Christopher Pearce

Mr Fung said Airtasker had doubled its total number of users from 250,000 to more than 600,000 since May 2015, and had grown its transaction volume at more than five times year-on-year to more than $40 million annually.

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While the company has not yet broken even, he said investors could see the huge – as yet untapped – market in Australia, and the potential for international expansion further down the track.

Morning Crest Capital partner Fred Bai said the company had shown "awesome progress" since it invested last year, and had the potential to reform the whole labour market.

Foreign expansion

At the time of Morning Crest's first investment Mr Fung said Asian, and particularly Chinese, expansion was a future goal. Now he says that, while domestic growth remains the priority, it will soon begin to investigate overseas options.

"If we get one in every hundred domestic service transactions going through our marketplace then that would be a billions of dollar business," he said.

"Overseas expansion is a massive step and I think it is something we can definitely explore within the next 12 months, but it is not our key focus."

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The company is putting great emphasis on the quality of its technology platform, and has recently hired former Dick Smith Electronics chief technology officer Paul Keen and the former local boss of takeaway delivery start-up Delivery Hero CJ Foo to work alongside Mr Lui in developing the online marketplace.

Mr Fung said he had closely watched the impressive initial public offering of fellow Australian online marketplace Redbubble in May and had continued to be impressed by the performance of listed jobs marketplace Freelancer.com. However, while it is a long term aim, an Airtasker IPO is not likely in the near future.

"Our preference is definitely to stay private longer, but I think at a certain point listing makes sense in the business," he said.

"A big advantage of going public is the trust and transparency that it forces on a company. We are really looking to build a marketplace, which is built on openness and transparency … so being listed on the stock exchange would definitely add that robustness to the business."

Paul Smith edits the technology coverage and has been a leading writer on the sector for 20 years. He covers big tech, business use of tech, the fast-growing Australian tech industry and start-ups, telecommunications and national innovation policy. Connect with Paul on Twitter. Email Paul at psmith@afr.com

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