Long-time competitors Elance and oDesk will join forces to create a new massive entity, yet to be named, that will launch in Q1 2014 and host millions of freelance workers and employers, in what's set to become the world's largest marketplace for hiring workers.
According to a joint statement today Fabio Rosati, chief executive officer of Elance, will lead the combined company, while oDesk CEO Gary Swart will become a “strategic advisor.”
Terms of the deal between the startups weren’t disclosed.
Elance and oDesk's model of linking employers with online freelancers who want to work from home has boomed in recent years, as more businesses move to the Web and take advantage of cheaper labour overseas.
In Australia, the 2012 Independent Inquiry into Insecure Work found that 2.2 million Australians, representing 23.9% of the workforce, were casual employees.
“It’s a market that hasn’t really taken advantage of the migration to online and the innovations in e-commerce,” Rosati said in an interview.
“By bringing the teams together, we feel we’re in a much better position.”
Rosati said the executive team and board will be balanced with people from each company. Both websites will stay open, and the company will keep both Silicon Valley headquarters, with oDesk in Redwood City, California, and Elance in Mountain View, California.
“Our two communities have preferences and unique differences,” said Elance CEO Fabio Rosati.
“We will honor the communities and support the two brands. But underneath there are synergies in investments in data science, trust and safety, mobile technology, education and many other things.”
oDesk had around a million businesses and 5 million registered freelancers, compared to 800,000 businesses and 3 million freelancers on Elance. oDesk has raised $44 million in venture capital, while Elance had raised about double that.
The pair were the main rivals to Freelancer.com, an Australian-based company started by Matt Barrie, which underwent an IPO earlier this year and is now valued at almost $1 billion. It has around nine million users at present, with Barrie ranked number seven on the BRW Young Rich list with a fortune of $185 million.