Swedish-based Ikea, which now owns 357 big boxes in 29 countries and serves two billion visitors a year online, quickly assembled a presence in the on-demand, sharing economy yesterday by announcing it would acquire 100% of San Francisco-based TaskRabbit for an undisclosed price. TaskRabbit will operate as a standalone company under CEO Stacy Brown-Philpot and continue to work with other retailers and commercial partners after the deal closes in October.
“When using TaskRabbit, a user is matched with a ‘Tasker’ after choosing a chore to be completed, such as furniture assembly, moving and packing, handyman work and home improvements,” reports Julia Jacobo for ABCNews.com.
“Though the price is undisclosed, it’s a rare startup acquisition that makes sense,” suggests Reuters “Breaking Views” columnist Jennifer Saba. “Ikea and TaskRabbit already had a cozy relationship. In the United Kingdom, the San Francisco firm started in 2008 by Leah Brusque had a pilot program to put together Hemnes beds and Bjursta tables. It also was heavily promoting its ‘taskers’ to wield their Allen wrenches in the United States.”
The Wall Street Journal’s Saabira Chaudhuri and Eliot Brown report that “documents related to a financing round from 2015 suggest TaskRabbit then had a valuation of about $50 million,” which they characterize as “pocket money” for Ikea in a deal that “represents a bigger strategic tack.”
“It also underscores a broader shift at many large companies grappling with big changes brought on by digitization. Many established corporations are increasingly turning to Silicon Valley to help their business grow, or slow their declines — sometimes spending heavily on small venture capital-backed startups that have strong traction with young consumers,” Chaudhuri and Brown continue.
“As more people shift to shop online, brick-and-mortar stores are looking for ways to offer convenient services to win back customers,” the Associated Press points out on CNBC.com. “Best Buy recently launched a program that sends its employees to customer's homes to recommend electronics. And department store operator Kohl's will soon offer services at about a dozen stores through a deal with online retailer Amazon, which would let Kohl's shoppers hire someone to install products at their homes.”
Because there seems to be nothing standing on solid ground that a certain Seattle-based enterprise does not seem to cast a shadow over, SFGate’s headline tells us, “Behind Ikea’s purchase of TaskRabbit, Amazon looms.” TheSan Francisco Chronicle’s Trisha Thadani points out “competition has been mounting for Ikea from rivals such as Amazon, which has also ramped up its offerings in home goods and installations.”
Amazon Home Services, indeed, has a partnership with TaskRabbit dating to March 2015. But its ability to mine data about its customers can presumably be replicated. “With this acquisition, Ikea may now have access to TaskRabbit’s trove of data and information on user behavior,” Thadani writes.
“It’s like buying a thousand anthropologists, who can say things like, ‘It looks like this population of urban, women Millennials are always asking for this task — could we sell a product that meets that need?’” Ryan Calo, an assistant professor at the University of Washington School of Law and an expert on the sharing economy, tells her.
“A purchase of TaskRabbit will get Ikea even more deeply into the tech space, although it has not been without some tech innovation of late,” write Kara Swisher and Theodore Schleifer for Recode. For example, this week “it released a nifty augmented reality app for the Apple iPhone, called ‘Ikea Place.’ Using the phone’s camera, a customer can scan a room and then place Ikea furniture virtually to see how it looks.”
Quartz’s Alison Griswold suggests that the success of TaskRabbit — it is reportedly profitable in each of its 18 cities — is emblematic of the fact that “America’s DIY spirit is dying,” as her headline puts it.
“Uber and Lyft give us rides, Postmates and Doordash bring us food, Instacart delivers our groceries and Luxe (recently acquired by Volvo) parks our cars. There are startups that will do your laundry, bring you booze, walk your dog, and give you a massage. Most of their workers are hired as contractors, without benefits and at relatively low wages. The ‘sharing’ economy is a mess of middlemen services, enabled by smartphone apps, VC subsidies, and wealth inequality.”
But other than that, it’s pretty cool, right?