Peter Thiel’s venture capital firm Valar Ventures has led a $10 million investment round in Lystable, an app for collaborating with freelancers, Lystable announced this morning.
The round includes earlier investors such as Max Levchin’s fund SciFi VC, Kindred Capital and Goldcrest Capital, as well as new backers Glynn Capital Management and Wilmont Ventures. Thiel and Levchin were co-founders of PayPal.
Lystable, which was founded in London and has an office in San Francisco, enables companies to onboard freelancers, create profiles for them, assign work to them, track invoices and make payments. Freelancers can also use the platform for functions such as checking the status of invoices.
“We are growing rapidly,” says Peter Johnston, founder and CEO, a former designer at Google and alum of the prestigious Techstars accelerator. “Our plan is to hire people to cope with that growth.”
Lystable plans to use the money it raised to introduce a new payments product, ideally by the end of the year, and hire senior executives to help that part of the business scale, says Johnston.
Target clients are companies in the media and tech sector that rely heavily on freelance talent, according to Johnston.
Lystable is SciFi VC’s “first investment focused squarely on the freelance space,” said Eric Scott, partner in SciFi VC, based in San Francisco.
Scott said the firm sees the data Lystable is collecting on freelance talent to be “enormously valuable.” While it is relatively easy for small firms to hire freelancers, it can be trickier for multinationals to find freelancers who work well with their team and fit into their culture, he noted.
“They address a problem no one else does,” he says.
Lystable raised $11 million in Series A financing in June 2016, bringing the total raised to $25 million since its founding in 2014, according to the company.
Lystable says its users include celebrity and style site POPSUGAR, the NY Daily News, Airbnb, ESPN, CNBC, IDEO, and Google.
Using Lystable’s basic platform is free but companies that pay their freelancers through the platform incur a processing fee. Paying through the platform is an alternative to direct bank transfers, which can be costly and, in some cases, impossible–presenting challenges as multinationals tap into an increasingly global talent base, says Johnston.
“The future of work is becoming more international,” says Johnston. “It’s going to be more important to get these freelancers paid, wherever they are on the earth.”
Lystable’s 2016 revenue was in the $1 million-$3 million dollar range, according to Johnston. The company employs 40 people.
There is significant competition in the freelance management space, with platforms such as Work Market and Upwork going after enterprise clients. Some companies, such as the Washington Post, have developed private talent clouds to manage freelancers.
“I think there will always be companies that decide to build vs. buy, but in most cases it’s still going to make sense to buy,” says Scott.