September 28, 2017 / 8:21 PM / 2 years ago

Breakingviews - TaskRabbit deal reveals what even IKEA can't build

People push a shopping cart past a warehouse of the Swedish furniture maker IKEA in Bordeaux, southwestern France, February 13, 2010. REUTERS/Olivier Pon

NEW YORK (Reuters Breakingviews) - Even IKEA can’t build everything. The Swedish furniture maker has bought TaskRabbit, the odd-jobs app. Though the price is undisclosed, it’s a rare startup acquisition that makes sense.

IKEA and TaskRabbit already had a cozy relationship. In the United Kingdom, the San Francisco firm started in 2008 by Leah Brusque had a pilot program to put together Hemnes beds and Bjursta tables. It also was heavily promoting its “taskers” to wield their Allen wrenches in the United States.

For the throngs of consumers who have cursed wooden pegs and graphical instructions, IKEA’s new corporate marriage might just save their own. The acquisition might be something of a rescue for TaskRabbit, too. After raising some $50 million over its lifetime, rivals such as Thumbtack offering similar labor for hire had gained ground.

Under its new deep-pocketed parent, TaskRabbit should be able to expand. IKEA’s 357 stores in 29 countries generated some $40 billion in worldwide sales last year.

Other brick-and-mortar outfits desperately seeking digital zip have found less persuasive quarry. For example, Bed Bath & Beyond’s acquisition of One Kings Lane may not have damaged the balance sheet, but it also hasn’t stopped a slump. Its shares have tumbled nearly 50 percent over the year.

After buying flash sales site Gilt Groupe for $250 million last year, Saks Fifth Avenue parent Hudson’s Bay kept descending into trouble. Wal-Mart, too, has been devouring e-commerce firms such as ModCloth and Bonobos with little obvious strategic fit with its price-conscious shoppers. In that broader context, IKEA’s deal looks far better constructed.


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