WIP Wildfire Alert: Peter Thiel’s Valar Ventures Adds Fuel to Fire With Lystable Investment

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This week it was announced that US-based venture fund Valar Ventures has invested $1.5 million in London-based startup Lystable. The news is a further indication that the use of digital platforms in the contingent workforce management space is a spreading wildfire that is being fueled by continuing investment.

Lystable, launched and seed-funded in early 2014, says its mission is “to give companies, both big and small, complete visibility over their external network. Imagine all your freelancers, agencies and services, lysted in one place, accessible by everyone in your company.” The early stage company, founded by a former Google employee, will use the new investment to continue to build out its design and development team (already consisting of talent from Google, Salesforce and other successful platform businesses) and to build out customer support in the US.

Lystable falls into an emerging category of diverse work intermediation platforms that Spend Matters has begun explicitly covering this year (for more information on WIPs, see here and here). The underlying digital platforms at the core of WIPs are enabling a wide range of new ways for enterprises to directly source and engage contingent workforce, often in radical forms (e.g., online virtual, on-demand, crowdsourced, “as-a-service,” et al). As such, it is a set of development that must – at the very least – be carefully monitored by services procurement and contingent workforce management program professionals.

 

A growing and highly diverse population of WIPs, now numbering over 250 worldwide, has been attracting investment for a number of years, and investment activities do not seem to be slowing down anytime soon. Upwork (formerly Elance-ODesk) received a $30M investment round in November 2014, bringing total investment since 2006 to $74M. Work Market received a $20M series C round of investment, bringing its total funding to $35M since 2011. Crowd contest platform 99Designs received series B funding in April 2015 to the tune of $10M, which came from Japanese staffing firm Recruit Holdings, bringing total to $45M since 2011. These are only a few examples of myriad funding events in the WIP space over past couple years ­–­ now Lystable can be added to the growing list.

The appearance and funding of this new company is significant in another respect, insofar as Lystable appears to exhibit the properties of other platforms that are deliberately attempting to give enterprises the ability to organize and manage their own affiliated, vetted independent (or freelancer) workforces on a P2P basis (as opposed to through staffing and SOW suppliers). Some of the companies that seem to fit this bill (and are often attributed the term FMS or freelancer management system) include MBO Partners, Onforce, Work Market, Upwork Enterprise, et al. While WIPs have tended to grow up outside of enterprise boundaries and disengaged from enterprise services and contingent workforce procurement processes, in the past couple of years WIPs have been emerging that are attempting to bridge enterprise boundaries. This is a set of developments that Spend Matters will be analyzing extensively going forward.

In conclusion, what seem like a relatively small investment in just another startup is more that it seems, if the cover is peeled back just a bit. The sudden appearance of and modest investment in Lystable is actually a bit more significant when put into the broader context the expansion and evolution of WIPs (though there is much to be understood about how Lystable will achieve “enterprise strength”). That said, the message for services procurement and contingent workforce management program professionals should perhaps be: “Where there’s smoke, there’s fire.” Stay alert for more Spend Matters WIPs analysis and reporting.

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