HourlyNerd Closes $22M Series C Round, Moving Beyond the Marketplace Platform Model

FusionOps funding

HourlyNerd, founded at Harvard Business School in 2013, announced its $22 million Series C funding round, bringing total investment in the company to more than $33 million. The latest round was led by General Catalyst Partners with participation from Highland Capital Partners, GE Ventures, Mark Cuban, Greylock Partners and Bob Doris of Accanto Partners.

Today, according to the press release, HourlyNerd is “a network of 25,000 business expert suppliers servicing 5,000 companies around the world, including nearly ten percent of the Fortune 1000.” An important segment for the company is financial services, including, we were told, a large part of the largest 10 investment firms.

HourlyNerd started as a kind of online marketplace, matching and connecting experienced independent business consultants (MBAs from the top business schools) with small and medium-sized businesses.  However, more recently, the company has found that it could aim higher — something Spend Matters discussed last Fall in an article, HourlyNerd Starts its Move to Engage Large Enterprises.

The press release about the recent investment stated that the latest infusion of capital “will fund continued development of HourlyNerd's proprietary enterprise software solutions and educate the market on the future of flexible business talent.”

What’s It All About?

We had an opportunity to talk with Rob Biederman, Hourly Nerd co-founder and co-CEO, and discuss what this was all about.

Biederman spoke to the continuing investment in the ongoing platform development, as HourlyNerd is drawn further into the large enterprise segment. Biederman noted that larger customers have been asking for more functionality.

“What we took to market was a place where you get projects [independent consultants] and collaborate with those people in your company,” he said. “And what we’re hearing from the market is that they want use it for a broader portion of their talent population. What seems like our coherent, thought-out vision today is an amalgamation of what we’ve heard from our biggest and most thoughtful clients.”

“We are realistic about how much we’re going to have to invest to build a comprehensive solution that really allows folks to thoroughly incorporate this new, growing part of the labor economy in their businesses,” Biederman added. “Our category doesn’t really exist at this time,” he said, explaining that there was an understanding that investment would be required to educate new buyers who are only beginning to learn how to leverage “talent on-demand.”

One interesting characteristic of the platform is that it not only enables the sourcing of individual talent but also sourcing of capabilities and projects from different service providers. “Many of our clients think of us as a one stop shop for external [business] expertise of all kinds whether it comes from consulting firms, boutiques, market research providers, etc,” Biederman said. “ They see the sourcing of external talent as a kind of continuous spectrum far more than the individual component categories.”  

When you are sourcing external talent, Biederman said, it’s not clear what is needed to get a particular job done. “Every piece of software that exists today forces you to make that choice before you begin.”  Clearly, HourlyNerd wants to offer a different option.

Biederman concluded by saying that “a new model that combines the best parts of FMS, consulting, staffing, and the best parts full-time employment is poised to do very well.”

Why We Find HourlyNerd Interesting

HourlyNerd exhibits a number of attributes of a work intermediation platform that we think will be strong contributors to success. These include being able to:

  • Extend beyond a marketplace model (which created an impressive population of expert talent) to another model that builds a bridge to large enterprise users — a kind of source-to-pay e-procurement solution for talent and talent-based services
  • Maintain a clear vertical focus on a specific category of workers and providers — that being higher-level business consulting, a category which has high value for enterprises based skills and expertise are not available through traditional channels or at a very high cost
  • Conduct market and customer-driven solution development to expand its platform services, gradually over time
  • Recognize that adoption cannot be assumed, but will require time and investment.
  • Finally, returning to the first bullet above, to foresee a different world where the sourcing and engagement of talent and services are not bifurcated and can be compared to options internal to the business to reach an optimal buying choice.  

It is for these reasons among others, that Spend Matters has selected HourlyNerd as one of the 50 Providers to Watch in 2016.

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First Voice

  1. Wil Beach:

    Interesting expansion.

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