Airtasker Ltd: Global Tasking Ambitions
Airtasker Ltd
Global tasking ambitions
Airtasker (ASX:ART) was founded in 2012 and has grown to be Australia’s leading online marketplace for “local services”, often described as a horizonal offering with almost infinite service offerings. The Total Addressable Market (TAM), as a result, is large with the company estimating a global market size across the US, UK and Australia of $600bn+ in FY21. The group has also established operations in the UK (2018), Ireland (2020), New Zealand (2021) and Singapore (2021). US entry began with the $3.4m acquisition of local services marketplace Zaarly in May 2021. ART listed in March 2021 raising gross proceeds of $83.7m at $0.65/share, $68.7m representing a selldown by existing shareholders and $15m in new funds to fund marketing, product development, working capital and offer costs. Since listing, ART has raised a further $20.7m at $1.00/share to fund both the Zaarly acquisition and accelerate further investment in offshore markets. The marketplace model involves charging both a service fee to the provider and booking fee to the customer. The service fee is on a sliding scale, rewarding regular providers with a lower commission rate. Market launches are planned for 1HFY22 in Kansas City, Dallas and Miami.
Business model
ART is an online marketplace that matches service providers with customers via mobile and web applications. For this service ART charges a service fee to providers and a booking fee (introduced in 2019) to customers. The service fee moved to a sliding scale in 2019 based on customer ratings and provider earnings over the preceding 30-days. The rate ranges from 10% ($4,800 in the last 30-days with excellent ratings) to 20% ($800 in the last 30-days and fair ratings). ART prides itself on being a destination site with no reliance on ad searches for traffic.
Exceeded prospectus forecasts in FY21
ART delivered total GMV of $153m in FY21, exceeding prospectus forecasts by 7% and FY20 by 35%. There were 415k unique paying customers in the year to 30 June 2021, also above prospectus, while underlying pro forma EBITDA was breakeven. Net cash following the recent raising was $45.9m, ready to invest into accelerating international expansion, with $20m set to be invested into international over FY22 and FY23. Market launches are planned in the US cities of Kansas City, Dallas and Miami in 1HFY22.
Peers are online marketplace operators
We see peers for ART as businesses operating “marketplaces” for services ideally, but goods as well if such goods are not owned/warehoused by the marketplace. Such marketplaces typically have no inventory, operate a “negative” working capital model, rely on ad-searches for new customer generation and derive revenue by charging a service fee on the gross transaction fee. Domestically this would include MyDeal (ASX:MYD), Mad Paws (ASX:MPA), HiPages (ASX:HPG), albeit subscription based, Freelancer (ASX:FLN) and Redbubble (ASX:RBL). ART is currently trading at a significant FY21 EV/revenue premium to this domestic peer group.
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