Handy In Talks To Acquire Homejoy As Home Service Startups Consolidate

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As more startups rush into the business of providing on-demand services for our every consumer need, we’re also seeing an inevitable move to some consolidation. In the latest development, Handy — the on-demand cleaning, plumbing and other home services platform — is in talks to acquire Homejoy, another home services startup that focuses specifically on cleaning.

Sources tell us that the talks are well underway, but have not yet completed. Certain details — such as whether key employees, like Homejoy’s CEO and co-founder Adora Cheung, would stay on post-acquisition — are still to be decided. We’ve not yet been able to nail down a price.

Contacted for comment, a Handy spokesperson provided us with this statement:

“In the past year Handy has grown ten times in both revenue and bookings and is now processing over 100,000 transactions per month. Handy is now more than twice the size than any other player and is the clear leader in the category. Over the last 14 months Handy has successfully completed two relatively small acquisitions, and continues to monitor the category for other bolt on acquisitions.”

The two acquisitions he’s referring to were of Exec early in 2014 to expand its footprint on the West Coast; and Mopp in the UK later in the same year to expand internationally.

There are a lot of similarities between the two companies. They both, for example, focus on providing a simple platform and app for freelance home service people to tap in to pick up jobs, and for consumers to seek out and hire trusted people for such jobs, with Handy and Homejoy both taking a cut for providing services such as vetting the workers and also managing payments at both ends. They have both made big efforts to expand outside of their U.S. markets.

But in other regards, Handy is the bigger of the two. Not only does its platform encompass more than just cleaning services, but it has raised nearly twice as much money to build out its buisiness — just over $60 million to Homejoy’s just-under $40 million. In September 2014, the company rebranded to Handy from Handybook with the ambition of becoming the “Amazon for home services” — a moniker that Amazon, unsurprisingly, would also like to own.

Prior to acquisition talks, Handy has also been aggressive in moving in on Homejoy’s business. Last year, it took over a trial the latter had in place with Airbnb to provide cleaning services to Airbnb hosts — potentially a lucrative contract in the ‘B2B2C’ market to grow the business quickly without such an emphasis on organically picking up each and every new customer. That trial became a full service just earlier this week and also lets Airbnb hosts hire plumbers and others through the platform for a reduced rate.

On top of this, there seems to have been other problems at Homejoy. Mark Vranesh, an ex-Zynga executive, resigned from his role as the company’s CFO earlier this month. And last year the company halted operations in Canada and France. [And, as you can see in the comments below, it also faced some backlash and loss of customers after prices went up last year.]

On top of all this, the spectre of Uber and its $6 billion warchest are an ever-looming presence for all comers in the collaborative consumption space: today Uber’s focus may be on transportation and logistics, but with that bedrock secured, Uber could move on to anyone’s on-demand lawn and own it. Yet another reason why it makes sense for companies like Handy and Homejoy to band together.