Deal To Watch: The Uber Labor Marketplace

Key Stats:

Problem

Shift work is the backbone upon which retailers, foodservice and hospitality organizations operate. Unfortunately, this backbone can often be left paralyzed due to the cost and time constraints of business, which can cause irreversible damage to the employee base. With the cost of turnover pegged at $7K per employee (including cost of recruiting, onboarding, training, etc.), the fact that many organizations in these sectors still turnover their entire shift work employee base in any given year is hard to fathom.

That literally means millions of dollars in lost profits for organizations with 1000’s of shift work employees on a yearly basis. There are two key points of friction, like metal-on-metal, that cause these staggering turnover figures. The first is on the business side. In order to keep cost low, while maintaining a quality level of service for customers, organizations are pushed to create shift schedules that might work for a robot, but would never be optimal for a human.

The second is on the employee side where most workers can only get 26 hours of work per week in any one job, forcing them to take on multiple jobs in order to make ends meet. Between a challenging and volatile work schedule, and limited hours most employees will turn over as they seek out better opportunities for themselves. Currently, both businesses and employees are at the mercy of the other, but they aren’t playing on their own terms. A new solution is needed.

Solution

Jobletics provides a comprehensive on-demand labor marketplace that qualifies, and vets potential employees to fill various skilled shift work positions. Businesses use Jobletics to access skilled labor when and where they need it from a vast pool of qualified applicants without the clunky overhead of an HR department trying to pull only from its own network.

Jobletics also provides the ability to rate workers to ensure consistent high quality, and even allows simple payment without lots of paperwork and hassle. Employees utilize the platform to set their own schedules, find work when and where they want it, and are never tied to just one organization. In this way they are empowered in their work rather than bogged down by shift work bureaucracy.

Why We Like it

1. Market size opportunity: The foodservice industry alone spends $1.9B on temp staffing needs every year. More broadly, the overall part time staffing market is $47B. With so much room to run, and no solutions that currently services the market really well, Jobletics has a tremendous amount of room to run.
2. Strong early growth: In 2017, Jobletics grew revenues 380% year-over-year and surpassed $1M in run rate revenue by the end of the year. This was across 300 clients in three cities including San Francisco, Boston and Philadelphia. The customer base includes strategic customers such as Roche Brothers, and Compass Group , a $19B food management company. This ability to sell through to major organizations is a very positive sign that the value prop and management team resonate with the right people.
3. Temp / Part time differentiator: In addition to servicing 1099 part time employees, Jobletics is built to also onboard W-2 employees allowing for upstream movement into mid-size business staffing needs. This has the potential to reshape how businesses employ staff across all levels of an organization and thus is a unique differentiator to potential future competitors.

The Leadership

1. Rahul Sharma, CEO & Co-Founder: After spending time as an engineer at both LinkedIn and Yelp, Rahul decided to found Jobletics. The inspiration came from his observation of the pain points he saw growing up within his families food and retail businesses that always had staffing challenges. His background suits him well to not only build, but also envision how the product works for the customer
2. Shane Arnold, (COO) & Co-Founder: Shane has a strong educational background from both MIT/Sloan and Wharton for his MBA. Having served in various marketing and operational roles both on the consulting and business side he comes with more than 15 years experience helping to build and support businesses.
3. Joe Kelley, Investor & Advisor: Joe was formerly EVP of Price Chopper, President & CEO of Marsh Supermarkets, and also served as President of Stop & Shop New England Division. He comes with an abundance of knowledge and experience, and also knows intimately the challenges of part time staffing. Having Joe bought in will help to drive early market adoption and provide a sounding board for the management team to ensure they are taking the necessary steps to succeed with large organizations.

Rating

The Recommendation:

With a large market opportunity, a very palatable valuation, almost no comparable competitors, and a product that has already gained traction with major retailers, I think Jobletics presents an attractive investment opportunity. The $3.7M pre-money valuation with $1M in ARR presents an attractive entry point as the team looks to invest in product and marketing with capital raised. The strong management team has already proven it can execute quickly, and the market has responded with strong early signals.

As the team expands to more than 3 markets, grows the team, and builds the customer list, Jobletics has the opportunity to become “THE” on-demand staffing solution for shift and part time work. And thanks to SeedInvest, “Simple Weighted Incentive For Time,” or SWIFT, when you invest before April 13, you will actually invest at a 19.2% discount to the current valuation.

For these reasons, I call this one a Top Deal!