Top Deal: An In Depth Look At Moonlighting

Key Stats:

Summary

The Moonlighting team has been selected as a “Top Deal” by KingsCrowd. This distinction is reserved for deals selected into the top 10% of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com

You can also see our Founder Profile with Founder & CEO of Moonlighting, Jeff Tennery HERE, which was performed as part of our due diligence process.

Understanding What Drives This Business Opportunity?

Companies like Airbnb, Uber, and TaskRabbit were all founded on the premise that everyday people can provide value to each other. With this in mind, these companies have provided a solution that is changing the way value is provided. In today’s world, being hyper-connected has introduced new ways for consumers to make and spend money.

With the click of a button on our phones, we can request a ride, book a room, order speedy food delivery, and so much more. Although the gig-economy is not a new concept, the aforementioned companies have underscored the rise of this space while propelling its growth at the same time. The handful of gig-economy companies that have become unicorns have all inspired a wave of entrepreneurs to capitalize on the growth of this economy. There are currently 4 million people working through the gig-economy and that number is expected to hit 9.2 million by 2021.

With the sustained growth of the gig-economy, it is only natural that the future of work will encompass technology that will give everyday people the ability to pursue the career they always wanted while doing work that they truly love.

The idea of freelancing drives the gig- economy. After the 2008 financial crisis, this idea materialized and is now perpetuated among the next generation of workers. Freelancers make up 35% of the current workforce and many believe that this growth is just the beginning. That number is predicted to reach 43% by 2020.

That’s why white-collar freelancing platforms like Upwork (Planning IPO at ~$1B valuation) and blue-collar freelancing platforms like Thumbtack ($1.3B valuation) have grown into billion dollar unicorns.

But this first wave of freelance platforms has failed to do two things really well, which need to be improved on. The first issue is that with every platform focusing on something specific it requires users looking for freelancers to search across multiple and build brand allegiances to various platforms for specific needs.

The second issue is something we often see with an early entrant in a new nascent market. The fees charged by these platforms are relatively exorbitant. They typically take a 20% cut from each job, cutting heavily into th e income generated by freelancers.

Creating a holistic platform that acts as a marketplace for any type of freelancer, blue collar or white collar, driver or developer with fees that help rather than hinder the freelancer is where our latest Top Deal fits in. The next wave of the freelance economy is coming as the market matures and we think Moonlighting is going to be the prominent solution for the space.

Solution

Moonlighting is a company that is capitalizing on the growth of the gig-economy while differentiating themselves from the startups that started the trend. The company is the first on-demand, mobile marketplace that empowers people to get things done and make extra money regardless of what the skill or task is. Moonlighting believes that the freelance industry is booming, however participants are at the mercy of flawed and individually-centralized job marketplaces.

The company was founded in 2014 with the mission of creating a free and open marketplace that gives everyone a shot at getting discovered and the ability to build their own workplace independence. From being a driver to being a contractor or an artist, if you need you can find it on Moonlighting.

With Moonlighting’s mobile app, individuals can request freelancers to do any type of job. Freelancers can search jobs, respond to direct hire requests, and advertise their services on the app. Not only can individuals source help but employers and recruiters may also use the app to find the necessary people they need.

Moonlighting is removing the middleman required in traditional freelance work by using a peer-to-peer model without platform commissions. That’s where a big part of the genius comes in. Instead of the 20% cut model, Moonlighting is a freemium platform with additional features such as advertising plans and support tools for managing your freelance life.

By moving away from the high fee structure towards providing value-add services to an open and inclusive marketplace we think Moonlighting is solving for the cost and exclusivity issues of current market participants.

Moonlighting is also on the forefront of pioneering a blockchain solution to vet and bring trust to the independent workforce on the platform. We don’t want the idea of blockchain to turn you off, instead we want you to realize the team is recognizing the potential for the freelancer / recruiting model to be a strong suitor for this type of tech. The team has been wise not to run into offering blockchain solutions, but rather they are planning for what that could look like and how they can manage in a world where there is more blockchain adoption.

Why We Like it

1. Market opportunity: As mentioned above, the gig-economy market is thriving. The team at Moonlighting is working hard to capitalize on this growth and has the pieces in place to expand to Canada and the United Kingdom in the near future. There is potentially 7.5 billion freelance professionals worldwide, large and small companies, recruiters and sole-proprietors looking to hire. This will provide the company with an opportunity to capture the 6 million freelancers they hope to bring to the platform over the next handful of years.

2. Traction: Since its launch in 2014, Moonlighting has been able to grow its userbase every year. Now with 650,000 registered users in the United States in all 50 states and over 1,500 cities, the company has generated more than $750k in revenue to date. In addition to being a top 10 mobile app in Apple’s “Jobs” category for over two years, Moonlighting’s Facebook page is also verified with over 22K followers.

The company is also consistently rated 4 stars or higher out of 5 stars on various sites showing the quality of the offering and how it is perceived by market participants. The team has also been featured on multiple national media outlets such as Forbes, Huffington Post, and USA today, in addition to having over $6M in backing from some of the most prominent media companies including Gannett and Tribune.

3. Monetization Model: The team has generated more than $750k in revenue since

beginning to monetize in April 2016 and is implementing a monetization model unique among gig-economy companies. Moonlighting monetizes both the employee and employer side of the marketplace by offering premium services on its app rather than relying on payment processing fees.

$40-$100 30-day job listings are available for job posters who want to instantly connect with the best professional flexible, part-time, and freelance candidates to source, recruit, and hire. Freelancers can also pay $10 a month to upgrade to a pro account providing them with promotion within the Moonlighting marketplace, unlimited use of the platform’s SaaS tools, unlimited direct communication with potential employers, and 0% processing fees on payments received through the app. That is the real differentiator that we think will set Moonlighting apart in a market that is laden with freelancer fees.

4. Experienced Founders: The three co-founders of Moonlighting all come from different backgrounds but are all very experienced in their respective fields. Before becoming CEO of Moonlighting, Jeff Tennery spent over 25 years in senior leadership roles at some of the world’s largest telecom companies including Verizon and AT&T Wireless. In our discussions with Jeff, his deep industry and management experience were on full display and we feel confident in his ability to execute on his vision.

Ritesh Johar is Moonlighting’s CTO and is an expert in technology and software architecture having designed, built, and managed Capital One’s mobile and online payments. He is the architect behind Moonlighting’s proprietary mobile payments platform that powers the Moonlighting marketplace.

Lastly, Moonlighting’s COO is Roy Slater, an operations and process excellence professional with over 20 years of experience leading UI Design, ROI optimization, and mobile technology development. With the long tenures of their respective careers, these three are well seasoned to grow a company like Moonlighting. Their ability to work together for the past four years is demonstrated by their year-over-year growth. Not only that, each founder seems to complement the skills of the other two as well as provide a value-add unique from the other two’s.

Rating

The Recommendation: Top Deal

With a unique solution within a saturated industry, Moonlighting seems to have found a value proposition that can work. Moonlighting is servicing every type of freelancer from computer programmers to delivery people.

They are also answering the needs of employers, recruiters, and the ordinary individual who wants an extra hand. With its ad tools, location-based mobile search, SaaS financial tools, and soon-to-be verified blockchain user profiles, Moonlighting is positioning themselves to be more than the run-of-the-mill gig-economy startup.

Moonlighting’s recurring revenue model, unique market positioning, incredibly experienced team, and user traction with plans for international expansion justify the $28M valuation. Over the next five to seven years we think the team can provide a 10X return on a current investment.