Today privately held Thumbtack announced it has acquired Toronto-based “prop-tech” firm Setter for an undisclosed sum.
What does Setter do? It’s a home management tool that gives your home a once-over for overlooked maintenance and safety issues, recommends qualified pros, and more. It then produces a maintenance report for the homeowner. And it’s a tool for keeping track of ongoing home maintenance issues. Time to change the air filter in the furnace. That kind of thing. It has positioned itself as a more customized (and therefore less scalable) Thumbtack competitor.
What’s so 2020 about Setter is its virtual component. It’s a video-based home inspection tool that audits a home for maintenance needs without any human contact.
Setter’s solution was created well before COVID as a convenience measure. Yet it fits loosely into a trend we’ve written about. The use of remote tech as both a safety measure and a force multiplier for home services pros. And this trend took on new meaning in 2020.
NextDoor certainly saw this future with its acquisition of the AR-based home maintenance app Streem back in December 2019. Again, in the before times. Then, FrontDoor saw the potential for technologies like Streem to allow home services pros to help homeowners handle easy tasks via “see what I see” solutions. This allows pros to allocate their service fleets more efficiently. A potential game-changer if the adoption is there.
Once the pandemic hit, these technologies took on new meaning as ways for homeowners to get some help without letting a stranger into the house. This is how COVID acceleration happens. A trend that would have taken years to unfold has years shaved off of its adoption curve.
In addition to a greater interest in remote tech, the pandemic has also created an inward focus among consumers. Less time at the office and less money spent on meals and vacations means more attention paid to home improvement.
What’s Thumbtack’s Plan?
Setter is not an AR tool. It’s really just a video chat app connected to a platform that helps homeowners stay organized so they don’t accidentally die from CO poisoning. It also has a concierge layer in which the home inspector makes recommendations and guides the homeowner on how much they should pay for a given service. The company charges $175 for its annual home services plan.
The company has raised a reported $12 million since its inception from investors including Sequoia and NFX.
Thumbtack, a marketplace that matches home services pros with homeowners, sees a lot of potential synergy with Setter.
In a blog post, Thumbtack Co-founder and CEO Marco Zappacosta said the acquisition will deepen the company’s relationships with homeowners. And this in turn will generate more jobs for Thumbtack’s network of contractors.
“This is an enormous step for Thumbtack,” Marco wrote. “We won’t just be the platform homeowners turn to when a pipe breaks. We’ll be the only app any homeowner needs for the care and maintenance of their home. For our pros, this means there will be more projects than ever on our platform.”
Great Time for Acquisitions
While we don’t know the terms of this deal, our hunch is Thumbtack didn’t pay a premium for Setter. It’s true that the home services space has fared better than most during the pandemic. But in any space with multiple competitors today, smaller and weaker players will be pursued. Sector leaders have access to capital to acquire market share, complementary tech, top talent, whatever it takes to consolidate their positions. Lightspeed POS’s recent rollup is a case in point.
We wouldn’t be surprised to see a few more deals close before we take a holiday breather. And wait to see what 2021 will bring us.
