Airtasker IPO to bring gig economy to the ASX

Australian online marketplace for local services, Airtasker, has kicked off an $84 million initial public offering (IPO) and plans to make its ASX debut under the ticker code ‘ART’ next month.

This is quite a feat for a business that reportedly began in chief executive officer Tim Fung’s living room nine years ago.

The company is aiming to raise $83.7 million through the issue of 128.7 million shares at $0.65 each, implying a $255.4 million market capitalisation upon listing.

The offer will include 105.6 million existing shares from selling holders, with most of the IPO proceeds lined up to go to them. News reports say this includes Seven West Media’s (ASX: SWM) entire stake worth around $50 million.

After paying back offer costs, the rest of the funds will be used for marketing and investment in product development with plans on the horizon to expand the platform internationally.

The offer opens on Monday and is expected to close on 9 March with a proposed ASX listing date slated for 22 March.

Job outsourcing concept

The Airtasker platform is based on the notion that busy people are willing to pay someone else to run their errands.

Customers post tasks and users bid to do them with Airtasker pocketing commission via both booking fees from the customer and service fees from the “tasker”.

Jobs range from cleaning or handyman services, moving house or furniture assembly, babysitters, food and flower delivery services, pet grooming, to resume writing and marketing and design services.

Work completed by taskers is generally freelance or ‘gig work’ with users often relying on good ratings and references in order to be chosen to complete the task at hand.

“Airtasker provides a significant number of people the opportunity to support themselves financially, as well as enabling a much broader base of people to supplement their incomes, and in recent times providing many with working opportunities in times of job-related stress such as during the COVID-19 pandemic,” Airtasker chairperson James Spenceley said.

According to the company’s prospectus, more than 4.3 million registered users have joined Airtasker’s platform to date and about 950,000 customers have purchased services from inception to December 2020.

The online marketplace is expected to have 405,000 unique paying customers this financial year with two-thirds of transactions coming from returning customers.

In a bid to increase customer and tasker usage frequency, the company is also planning to establish new marketplace models under its Airtasker Superstore growth strategy, such as Airtasker Listings, Instant Booking and Subscriptions.

Market opportunity and global expansion

Airtasker’s prospectus claims the total addressable market for local services in Australia adds up to $52.3 billion.

Furthermore, Mr Fung said the company aimed to expand its platform globally, with the total addressable market of five other regions (Ireland, New Zealand, Singapore, the United Kingdom and the United States) estimated at a whopping $591 billion in 2019.

“We believe the opportunity to empower the local services economy on a global scale is truly massive,” he said.

“Striving towards this opportunity, we will continue to explore, experiment and iterate to drive user acquisition, improve frequency of use and expand our addressable market by investing into organic and paid marketing, establishing new marketplace models and expanding our global reach.”

Financial performance

Airtasker is projecting $143.7 million in gross merchandise volume for the 2020-21 financial year and revenue is forecast at $24.5 million with a two-year compound annual growth rate of 32.1%.

However, the company is expecting an after-tax loss of $6.2 million this financial year – up $1.1 million from last year, although a significant improvement from the 2019 financial year loss of $27.2 million.

The majority of the IPO proceeds will pay back selling shareholders and offer costs, with just $6 million of the $83.7 million allocated to marketing expenses and $4 million to go toward investment in product development.

Airtasker is lined up to be the first major ASX float of 2021 and market commentators have called it the “first big test” for a dubious market after the GameStop drama and amid the current pandemic-affected economic environment.