The world of professional services has long relied on contractors to fill in for assignments and projects that might not be a part of the course of daily work, but are essential work nonetheless. Today, a startup that’s built a marketplace to make it easier for freelance developers, designers and others with technical skills with those job opportunities is announcing a significant round of funding to expand its business.
Malt, which provides a way for developers, data scientists, designers, project managers and others working in related fields to connect with fixed-term job opportunities in their fields, has picked up €80 million ($97 million at today's rates), money that the company plans to use to expand its business to more markets.
We understand from sources that the investment -- led by Goldman Sachs Growth Equity and Eurazeo -- values Malt at €400 million ($489 million).
Vincent Huguet, Malt's CEO who co-founded the company with Hugo Lassiège and Jean-Baptiste Lemée, said in an interview that the funding in part will be used toward continuing to expand the company across Europe with a view to, longer term, also breaking into the U.S. In Europe, the company was founded in Paris, and it currently has operations in France (Paris, Lyon), Germany (Munich) and Spain (Madrid). The plan is to extend that to Benelux next, with the U.K. and Italy after that.
The company has to date amassed 250,000 freelancers in its community, with 30,000 businesses tapping this pool to fill jobs. End customers include the likes of Unilever, Lufthansa, Bosch, BlaBlaCar, L'Oréal and Allianz, and it also partners with traditional consultancies like McKinsey to help them source people for projects. Altogether the company has handled some €300 million in business since being founded in 2013.
These numbers, it seems, are just the tip of the iceberg. It's estimated that there are some 6 million people in Europe working as freelancers today, and Malt estimates that the freelance consulting market is worth some €350 billion annually in the region.
Although recruitment for many parts of the economy has largely gone digital in the last two decades, Malt is tackling a part of the temp economy that has ironically held a strong offline presence.
"The most important thing is that we are a very open marketplace, an Airbnb-style search marketplace," he said. "It's all really based on our search engine. In a market that is very opaque, where offline and online players [those connecting technical workers with jobs] are protecting their bases, we have opened the information." It also provides payment services and advanced solutions for some of its customers once people are engaged, he added.
"Freelancer" is a pretty loaded term in the tech world today -- it could mean anything from a gig worker delivering food, driving you around or cleaning a house, from the plethora of people who work on fixed-term contracts, and sometimes the implications are not great. Critics will say companies lean on the freelancer model in order to skirt around having to provide extensive benefits to those doing the jobs.
Malt is working in a somewhat different area, focusing on a gap in the market that has been around for a long while, finding people with specific, valued technical skills to fill in for project-based work, but has often been a tough one to crack for employers, Huguet said.
"We are going after those who charge a few hundred dollars per day and connecting them with mid- and large-sized companies," said Huguet, who described Malt as very different from the likes of Fiverr, which also lets people find skilled workers but focuses on finding the lowest bidder for a job. "You search for a specific freelancer as the employer. You don't post a specific task for freelancers to respond." The average time of engagement is around three weeks but might be as long as three months, he said.
What has been interesting -- and has definitely had an impact on how Malt has grown, and the investment it's announcing today -- is how much the working world has shifted in the last year and a half. Not only has COVID-19 changed how people work in offices -- if they are working in offices at all anymore -- but the rapidly changing circumstances have somewhat played into the idea of building out work strategy on more concrete short- and medium-term goals, with longer-term remaining a conditional. This fits the kind of jobs that Malt typically helps fill requirements for, and the changes also has meant more workers coming into Malt's universe looking for work.
"What we can see already and predict in the next quarters is that we will be a post COVID winner," Huguet said. "People are now considering different options. The idea of a full-time employee was that when everyone was in office people knew how to work 9-6, and that's what was expected. Now that people are working on projects, employers are more open to consultants. This plus the bigger hiring freezes helped us grow much faster. The market and the mindset have changed."
Similarly, people who might have previously looked first for full-time employment are now feeling more secure putting their eggs into the freelance basket. "More than 90% of freelancers are joining us by choice," he added.
What will be interesting is to see how and if companies like LinkedIn, which has been a strong player in professional recruitment, make more headway in this space, on the back of a launch of a freelancer marketplace earlier this year.
"We are watching what it's doing, but we think it will be hard for them to do," Huguet said. He pointed out that LinkedIn's profiles today are dedicated to classic recruitment, so doing the matching for freelance is very different.
Regardless of how LinkedIn's interest plays out, its activity there also points to a big opportunity, one big reason for why investors are backing Malt right now.
“Malt is at a pivotal time in its development. This new round of funding will allow the company to scale rapidly and drive even greater impact," said Yann du Rusquec, a partner at Eurazeo. "We are excited to partner with Vincent and Alexandre — and offer the expertise of our Growth and Venture teams along with the depth of Eurazeo's network in Europe — to drive Malt’s future success.”
“We are delighted to support Malt to build the leading freelance marketplace in Europe," added Alexandre Flavier, executive director at Goldman Sachs Growth Equity. "Malt is at the forefront of the future of work, promoting agility, innovation, impact, freedom of choice, making freelancing simpler and more reliable. We are excited to partner with Malt’s founders, empower their community of highly skilled freelancers, and give companies access to the world’s best freelance talents."