Chicago-based Shiftgig, a leading online platform and mobile marketplace that connects local hourly workers and businesses in a range of verticals (e.g., food/hospitality/events, retail, logistics), has acquired BookedOut. The terms of the deal were not disclosed. BookedOut, founded in 2014, developed an online work platform in some ways similar to Shiftgig, but more specifically focused on enabling agencies and consumer brand companies to staff their experiential advertising campaigns with appropriate freelance talent.
The combination of the two businesses appears to be, if not a marriage made in heaven, then a highly complementary arrangement. Shiftgig is able to add a new market segment to those it already serves, and the fledgling BookedOut business gets to leverage a well-funded business that is already built out across a good number of metro-area markets. If the joining of the two businesses is successful, then it appears it will be accretive to stakeholders.
We had a chance to talk to Shiftgig CEO Eddie Lou, who pointed out that taking on BookedOut’s 30 or so employees would also be advantageous to his fast growing company that is staffing up in a very constrained labor market for skilled talent. According to Lou, Shiftgig, which raised $22 million in capital in 2015, has been experiencing 3X annual revenue growth.
"We are thrilled about the transaction and the opportunities it will provide for our clients, our partners, and employees," Jay Lenstrom, CEO of BookedOut, said in a press release accompanying the announcement. "BookedOut helps agencies and consumer brands maximize the impact of a mobile workforce through best in class technology and service and in combination with Shiftgig would further enhance that capability."
Lenstrom will join Shiftgig as a member of the executive team, leading the experiential sector expansion that will leverage Shiftgig’s market presence.
We asked Eddie Lou about what might happen with the two different platforms. He basically told us that there were no plans to consolidate on either platform. Moreover, he said it was clear that the BookedOut platform had been designed with many features specific to the experiential advertising market, including a number features that would be valuable in the market segments currently served by Shiftgig. From this, we assume an organic integration or platform development over the long term.
M&A has been occurring modestly in the online work intermediation platform space, and without any signs of acceleration. Earlier this year, Toptal acquired SkillBridge, and more recently staffing giant Randstad acquired twago (a bit of a different case). But other than that, it appears there was no other M&A activity in an industry that is populated by hundreds of relatively small platform businesses.
Work intermediation platforms that bring together low wage, commodity gig workers and the various businesses that provide standardized jobs by using marketplace matching and mobile technologies look like highly efficient Uber-like businesses. However, both Shiftgig and BookedOut have pursued W2 payrolling models — applicable to most workers — which should insulate them from worker misclassification problems. All things considered, the future looks promising.