We might consider today an Insta day since we’ll have written about Instacart and now a company that has just raised $60 million called Instawork. We know that Instacart is a grocery delivery app that is transitioning into an advertising and social network app. So what is Instawork? Instawork is a digital marketplace for connecting local businesses to qualified “professionals”.
This sounds interesting to us since we know that one of the major constraints on the local, small business sector is the ability to find, hire, and retain quality employees. There are plenty of stories out there about the hiring challenges small businesses are having with some hope that once stimulus funds dry up in the fall, workers will choose to return to the job market.
In the meantime, Instawork will be at least one means for small businesses to find some employees. With the addition of $60 million to the $40 million Instawork has already raised, the company can expand its coverage. The company will also use the fresh capital to add new markets and categories.
One Million Workers
So let’s look at the company’s two-sided (or marketplace) model.
Founded in 2016, Instawork is a digital marketplace that aims to connect local businesses with “more than one million workers”. Currently, the company is placing employees in food and beverage, hospitality, and warehouse/logistics businesses. The company operates in 25 U.S. markets. These include the most likely suspects: Austin, Chicago, San Francisco, Dallas, San Diego to name a few.
This screenshot shows the kinds of positions that company is helping businesses fill.
We think the company is on to something pretty interesting. From what we can tell Instawork is employee-centric, offering a way for potential employees to choose the best opportunities for themselves. The App seems like it has the necessary information for both sides of the equation to succeed. For instance, the “pros” as they describe them can “work where you want, when you want”.
The next screenshot suggests Instawork understands the key challenges businesses face in hiring short-term employees. We point to the term “vetted” workers and “We handle the rest” as key benefits for the hiring businesses.
A Lot of Vetting
We are left wondering a couple of things. First, while they may have over a “million” workers in their data set, we wonder how they’re vetting them all. Also, they are essentially a local business. Few short-term employees making upwards of $18 per hour are traveling across state lines to fulfill demand in other markets.
To us, that suggests for the company to be really successful it needs to build out its “vetted” workers in a select number of markets before expanding geographically. Otherwise, businesses owners might find few options in their markets.
Nevertheless, we’re encouraged to see a start-up tackle one of the primary challenges small business owners face in today’s market — finding, hiring, and retaining quality employees. If Instawork can really make a go of it and build enough coverage in their key markets, it might turn out to be a really compelling model for both “gig” workers and their hiring companies.