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T. Rowe Price Leads Investment in oDesk
SAN FRANCISCO, March 21 |
SAN FRANCISCO, March 21 (Reuters) - Online contract-work company oDesk has raised $15 million in venture funding led by T. Rowe Price, illustrating the continuing faith investors place in using technology to eliminate the middleman.
oDesk, based in Redwood City, Calif., allows businesses to hire any of its contractors directly online, rather than through an outsourcing company that selects its own stable of workers.
The 1.6 million contractors at oDesk do work such as accounting, legal projects and web development remotely, a burgeoning business Chief Executive Gary Swart described as "ework". The category should be worth $1 billion this year, he said.
"We want to invest in companies that can be much, much larger" compared with today, said T. Rowe Price Investment Manager Henry Ellenbogen. "We think this company has a group of executives that can scale."
oDesk's clients can track the work done through automated screenshots, ensuring that the contractors are working the hours they bill.
The company has about 300,000 clients who work with 1.6 million contractors around the world. The contractors get paid by oDesk, which charges the business that hires them 10 percent of the contractors' pay as a fee.
Existing investors Benchmark Capital, Globespan Capital Partners and Sigma Partners also participated in the round, oDesk's fourth.
T. Rowe Price is one of a handful of mutual-fund companies that invests in early-stage private companies. It also holds stakes in social network Facebook, which has filed for an initial public offering, microblogging service Twitter, and several others.
Allowing more end-user control over selection has created big online businesses in areas ranging from travel to real estate, with companies ranging from Orbitz to Zillow tapping into the trend.
Startups continue to jump into the area, such as Airbnb, which allows residents to rent out their homes and apartments for short-term stays, and TaskRabbit, which connects people who need various jobs done with freelancers.
Separately, Gregory Stanger, formerly chief financial officer at travel company Expedia and textbook-rental service Chegg, is joining oDesk as CFO. Start-ups typically hire CFOs as they contemplate an initial public offering. Swart declined to comment on any future IPO.
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