Join the conversation with Tim Fung, the visionary CEO of Airtasker, and discover how this trailblazing platform is transforming the way we access local services. In this enthralling episode, Tim unveils the compelling origin story of Airtasker, delves into its core mission to create a trustworthy community, and shares the secrets behind the platform's financial triumph. We're not just discussing figures; we're revealing the strategic maneuvers that slashed cash burn and dramatically raised free cash flow. Plus, get an exclusive sneak peek into Airtasker's exciting international journey, with its remarkable growth in the UK market fueled by savvy partnerships, like their collaboration with Channel 4, all setting the scene for an even more promising future.
Fasten your seatbelts as we chart the course of Airtasker's upcoming brand reinvestment strategy, targeting a significant boost by 2025 with a laser focus on the burgeoning Australian market. Expect to be captivated by our projections of strong double-digit growth, stretching across Australia to the UK and US shores. Discover how Airtasker stands out in a market ripe with opportunity and minimal competition, setting the stage for a thriving business outlook. The episode wraps with an optimistic nod to the journey ahead, promising more updates as Airtasker continues its ascent. Don't miss out on this insightful conversation that will broaden your horizons on the gig economy and its boundless potential.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Andrew Musgrave (00:02):
Welcome back to ASX Briefs.
Today we have the pleasure ofspeaking with Tim Fung, the CEO
of Airtasker, a platform that'sredefining how local services
are delivered across Australiaand beyond.
Airtasker has been makingheadlines just not for its
user-friendly marketplace, butfor its robust financial
performance.
Tim, welcome to the studio andwelcome to the ASX Briefs
(00:23):
podcast.
Thanks for having me.
All right, let's get started.
I think a good place to start.
Most people will know whoAirtasker is.
So if you want to give us abrief overview of the Airtasker
journey from that initialthought bubble many, many years
ago to where we are today andjust the variety of services
that you offer.
Tim Fung (00:49):
So Airtasker is a marketplace for local services
and, in pretty simple terms, weconnect people who need work
done with people who want towork.
The way the story got startedis I was moving apartments back
in 2011 so that's a long timeago now and I asked a friend to
help me move because he's got atruck that he uses to do
deliveries of his frozen chickennuggets products, and so this
just got us thinking is you know, why do we ask our friends and
family to do all these kinds ofjobs when there's so many people
(01:10):
out there who you know theywant to earn a living in this
way?
And what we worked out is thatit's really hard to find and be
able to trust people easily inyour local community, and it
really shouldn't be.
And so we set out to create amarketplace that would make it
really easy to build trustedrelationships in your local
community, and we thought if youcould get that going, then
(01:32):
you'd be able to unlock a lot ofvalue, because really every
single person's got uniqueskills, and to be able to
monetize those skills and earnmoney through that.
It's really enriching andsomething that we find really
fulfilling to be able to do.
Andrew Musgrave (01:48):
Well, I think you've certainly hit the mark on
that and I think with any sortof small growth company, the
financial health of the companyis really important.
So you've recently reported asignificant decrease in cash
burn, but also an impressiveincrease in free cash flow.
Can you just walk us throughthe strategies that have led to
these improvements?
Tim Fung (02:05):
Yeah.
So I think we set out this yearto be a full year free cash
flow positive and we're well ontrack to be doing that.
We've delivered our free cashflow in operating cash flow in
all three quarters this year,and free cash flow in the last
two quarters generated 2.5million free cash flow in the
last quarter alone, and so thatwas definitely our goal for the
(02:29):
year.
We're committed to doing that.
I think one of the things thatmost people, I guess, haven't
yet worked out about Airtasker,I think, is how high operating
leverage the business model is,and what that means is we have
um, a fixed investment that weneed to make into building a
world-class software platformand technology product.
(02:52):
But once that platform is built,the economics that sit on top
of that in terms of themarketplace are really really,
really attractive.
So we have a monetization rateof a little over 20 percent.
So for you know the averagetask value of about 250 dollars,
we're earning about 50 dollarsin in revenue um from that, and
of that $50 of revenue we have agross margin, a gross profit
(03:15):
margin, of about 95%.
So there's really not a lot ofcosts that goes with that.
So I think what people didn'trealize is we've built this
piece of software.
Now that we've built it and nowthat we're cashflow positive,
every incremental dollar thatyou make from here, 95 cents of
that essentially drops to thebottom line or can be reinvested
into more and more growth, andso I think it's quite a big
(03:35):
milestone for us to get to free,cash flow positive and really
excited about what we can dofrom here.
Andrew Musgrave (03:40):
Yeah, it's certainly a nice position to be
in, that's for sure.
If we just head offshore for amoment, up to the UK Now, the
expansion that you've had intothe UK has shown remarkable
results, with posted tasksincreasing by over 49%.
So can you just talk us throughsome of the key factors that's
driven that success?
Tim Fung (03:57):
Yeah, one of the things that we looked back into
how we, you know, essentiallybuilt a household brand name in
Australia was that we partneredup with Seven West Media or
Channel 7.
And over five years, inpartnership with Channel 7, we
were able to invest intobuilding brand awareness and we
20x'd our revenue from about amillion dollars to about $20
(04:18):
million during that period.
And then, when Channel 7, whenwe IPO'd the company, channel 7
walked away with 5x returns ontheir investment.
So it was a great win-win allaround.
And so we went to the UK.
We're like, hold on, we shoulddo that again.
And so we have, in our UKsubsidiary, airtasker UK.
(04:39):
We have accepted a 20%investment from Channel 4, which
is the Channel 7 of the UK, inexchange for $6.7 million in
advertising media.
And so, as we're building upour brand name in the UK, we're
doing it in partnership withChannel 4.
We've had a great start to that.
We basically put the ad on TV.
(05:00):
We saw a 30% pop straight awayfrom that.
But actually that's not reallythe exciting bit.
The exciting bit is that over acouple of years, you're
building a brand from sort ofnothing nobody knows who you are
to being well known in Londonand as we're going through that
journey now, you can see thegrowth is coming through and
yeah, last quarter we're up 49%and I'm excited about the
(05:22):
momentum we're building.
Andrew Musgrave (05:23):
Yeah, and I think those strategic
partnerships, particularly forsmaller companies, are just
crucial to get that growth.
So with these partnerships,they're crucial to the overall
growth strategy.
But are there any new ones onthe horizon?
Tim Fung (05:37):
Oh yeah.
So I think if you look atAirtasker being a really high
operating leverage business youhave in Australia, you've built
this software technologyplatform.
We've got a marketplace thatsits on top and spits out,
generates a lot of cash.
Now we're going to the UK andwe don't actually have to
replicate those fixed costsagain.
The software doesn't need to bereplicated, we're just going to
replicate the marketing.
(05:57):
And so, you know, as we go toeach country, it's really about
working out how do we find alocal partner who can invest in
and turbocharge our growth inthat market.
So you know, in the UK we're,you know, going to be expanding
our partnership strategy andthen, of course, in the US,
where we are right now is beingsuper disciplined about staying
(06:19):
cash flow.
You know very disciplined inhow we invest and you know we've
been very open about lookingfor a media partner over in the
US.
And, you know, no news to shareright now.
Andrew Musgrave (06:30):
All right, but with every expansion comes
challenges, of course.
So what are some of the biggesthurdles you've come across
going into those new markets inthe UK and the US, and how have
you addressed them?
Tim Fung (06:42):
So I think the thing about launching into new
countries for Airtasker is wedon't actually have to replicate
any operations, and I'm verythankful for that, because you
know, if you compare it to, say,a company that's building data
centers or building restaurantsor something like that huge
fixed costs, huge sort ofone-way doors that you got to
walk through, For AirTasker it'svery much just a sales and
(07:03):
marketing effort into each ofthose markets, and the great
thing about that is that'spredominantly variable cost.
If you need to tune it down,you can tune it down, as we've
done over the last two years.
But when you're ready to tuneit up, oh boy, you can really
really start to go.
And so the biggest hurdle Ithink that we found is that when
(07:26):
you're building out a productthat is built on network effects
which AirTasker very much is,you know network effects you've
got to be big to be able tooffer value to your users so
that they can find the taskerthat suits them.
How do you quickly get from zeroto that and how do you bridge
that investment gap?
Because it does require aninvestment in marketing.
And so the big thing that wesort of worked out is we should
do this with local investmentpartners rather than trying to,
(07:49):
you know, raise all that capitalourselves and take all the risk
ourselves.
Why don't we share some of theupside with Channel 4 or another
media partner?
And by doing that we've workeda way to bridge that investment
gap and really, really excitedabout that.
Andrew Musgrave (08:02):
Are there any other countries you're
potentially looking at to moveinto as well?
Tim Fung (08:13):
Yeah, look, I think the great thing about a business
model like Airtasker is thatevery country needs an Airtasker
, and what I mean by that isthat we don't offer the specific
services we don't define thatIn Australia there's a bit more
barbecue cleaning, In the USthere's a little bit more snow
shoveling, and in the UK I don'tknow there's probably tea
drinking or something I don'tknow.
But in every different countryyou might have slightly
different use cases.
But Airtask is kind of aplatform and we are very much
(08:37):
like hey, everyone needs a placewhere they can ask for
something to be done, andeveryone needs a place where you
can earn money by doing stufffor people.
And so I think literally wethink that there should be an
Airtasker in every singlecountry, and that's why we're so
excited about finding thismodel, which scales at a local
level through local mediapartnerships.
Andrew Musgrave (08:58):
Are there any competitors in other countries
to this sort of platform?
Tim Fung (09:02):
There are a lot of these folks that sort of started
with the Yellow Pages and saidoh, you know, to the local
plumber you used to pay $100 tothe yellow pages.
Why don't you come up, pay $100to me and I'll give you the
digital version of the yellowpages?
So in Australia you've gotthings like Hi Pages where you
know you can pay a hundred bucksand you know be listed in Hi
Pages.
In the US you have a companycalled Thumbtack or Angie's List
(09:26):
, which is q uite well known.
So there's a lot of these sortof like yellow pages 2.0 type
models.
But in terms of being ane-commerce platform where you
pay through the marketplaceplatform like you do with, say,
uber or Airbnb, there reallyisn't anyone who's sort of gone
out there and built anything ofmuch scale.
So you know that's a two-sidedproblem.
(09:46):
In one sense it's great becausethe ocean is so blue, that the
field is so green and white, butthere is a job in educating the
market as well.
So you know that's the flipside of that coin.
Andrew Musgrave (09:58):
Certainly plenty of opportunity.
There's no doubt about that.
So I think let's just wrapthings up what are some of the
key milestones you're looking toachieve in the next sort of 12
to 18 months?
And just some final commentsfor the shareholders that might
be listening.
Tim Fung (10:12):
So we're absolutely committed this year to reaching
a full year free cash flowpositive and that's really at a
group level.
Whilst we're investing overseas, we're still going to be free
cash flow positive and we aim tocontinue that into FY25 and
beyond.
So this is a business thatdoesn't need to raise any
(10:36):
further capital in order to growand operate.
We really, over the last year,moderated our investment into
our brand and so we're going tobe reinvesting into our brand in
2025.
Really excited about thatbecause the Australian market is
far from mature.
You know, we think that we canbe growing this business at big
double digit percentage growthnumbers for the next 10 years
and then into the UK and the USand we're really doubling down
(10:58):
on our media partnerships andjust going to get them to scale,
you know, in a pretty turbogrowth trajectory.
Andrew Musgrave (11:06):
Well, I think it's fair to say the sky's the
limit at the moment.
So there's little competitionout there and plenty of
opportunity, not onlydomestically but offshore.
I'm sure it'll just grow fromstrength to strength.
So thanks for joining us in thestudio today.
It's been great to chat and welook forward to further updates
in the coming months.
Thanks so much for having me.
Great Thanks, Tim.
Welcome back to ASX Briefs.
Today we have the pleasure ofspeaking with Tim Fung, the CEO
of Airtasker, a platform that'sredefining how local services
are delivered across Australiaand beyond.
Airtasker has been makingheadlines just not for its
user-friendly marketplace, butfor its robust financial
performance.
Tim, welcome to the studio andwelcome to the ASX Briefs
(00:23):
podcast.
Thanks for having me.
All right, let's get started.
I think a good place to start.
Most people will know whoAirtasker is.
So if you want to give us abrief overview of the Airtasker
journey from that initialthought bubble many, many years
ago to where we are today andjust the variety of services
that you offer.
Tim Fung (00:49):
So Airtasker is a marketplace for local services
and, in pretty simple terms, weconnect people who need work
done with people who want towork.
The way the story got startedis I was moving apartments back
in 2011 so that's a long timeago now and I asked a friend to
help me move because he's got atruck that he uses to do
deliveries of his frozen chickennuggets products, and so this
just got us thinking is you know, why do we ask our friends and
family to do all these kinds ofjobs when there's so many people
(01:10):
out there who you know theywant to earn a living in this
way?
And what we worked out is thatit's really hard to find and be
able to trust people easily inyour local community, and it
really shouldn't be.
And so we set out to create amarketplace that would make it
really easy to build trustedrelationships in your local
community, and we thought if youcould get that going, then
(01:32):
you'd be able to unlock a lot ofvalue, because really every
single person's got uniqueskills, and to be able to
monetize those skills and earnmoney through that.
It's really enriching andsomething that we find really
fulfilling to be able to do.
Andrew Musgrave (01:48):
Well, I think you've certainly hit the mark on
that and I think with any sortof small growth company, the
financial health of the companyis really important.
So you've recently reported asignificant decrease in cash
burn, but also an impressiveincrease in free cash flow.
Can you just walk us throughthe strategies that have led to
these improvements?
Tim Fung (02:05):
Yeah.
So I think we set out this yearto be a full year free cash
flow positive and we're well ontrack to be doing that.
We've delivered our free cashflow in operating cash flow in
all three quarters this year,and free cash flow in the last
two quarters generated 2.5million free cash flow in the
last quarter alone, and so thatwas definitely our goal for the
(02:29):
year.
We're committed to doing that.
I think one of the things thatmost people, I guess, haven't
yet worked out about Airtasker,I think, is how high operating
leverage the business model is,and what that means is we have
um, a fixed investment that weneed to make into building a
world-class software platformand technology product.
(02:52):
But once that platform is built,the economics that sit on top
of that in terms of themarketplace are really really,
really attractive.
So we have a monetization rateof a little over 20 percent.
So for you know the averagetask value of about 250 dollars,
we're earning about 50 dollarsin in revenue um from that, and
of that $50 of revenue we have agross margin, a gross profit
(03:15):
margin, of about 95%.
So there's really not a lot ofcosts that goes with that.
So I think what people didn'trealize is we've built this
piece of software.
Now that we've built it and nowthat we're cashflow positive,
every incremental dollar thatyou make from here, 95 cents of
that essentially drops to thebottom line or can be reinvested
into more and more growth, andso I think it's quite a big
(03:35):
milestone for us to get to free,cash flow positive and really
excited about what we can dofrom here.
Andrew Musgrave (03:40):
Yeah, it's certainly a nice position to be
in, that's for sure.
If we just head offshore for amoment, up to the UK Now, the
expansion that you've had intothe UK has shown remarkable
results, with posted tasksincreasing by over 49%.
So can you just talk us throughsome of the key factors that's
driven that success?
Tim Fung (03:57):
Yeah, one of the things that we looked back into
how we, you know, essentiallybuilt a household brand name in
Australia was that we partneredup with Seven West Media or
Channel 7.
And over five years, inpartnership with Channel 7, we
were able to invest intobuilding brand awareness and we
20x'd our revenue from about amillion dollars to about $20
(04:18):
million during that period.
And then, when Channel 7, whenwe IPO'd the company, channel 7
walked away with 5x returns ontheir investment.
So it was a great win-win allaround.
And so we went to the UK.
We're like, hold on, we shoulddo that again.
And so we have, in our UKsubsidiary, airtasker UK.
(04:39):
We have accepted a 20%investment from Channel 4, which
is the Channel 7 of the UK, inexchange for $6.7 million in
advertising media.
And so, as we're building upour brand name in the UK, we're
doing it in partnership withChannel 4.
We've had a great start to that.
We basically put the ad on TV.
(05:00):
We saw a 30% pop straight awayfrom that.
But actually that's not reallythe exciting bit.
The exciting bit is that over acouple of years, you're
building a brand from sort ofnothing nobody knows who you are
to being well known in Londonand as we're going through that
journey now, you can see thegrowth is coming through and
yeah, last quarter we're up 49%and I'm excited about the
(05:22):
momentum we're building.
Andrew Musgrave (05:23):
Yeah, and I think those strategic
partnerships, particularly forsmaller companies, are just
crucial to get that growth.
So with these partnerships,they're crucial to the overall
growth strategy.
But are there any new ones onthe horizon?
Tim Fung (05:37):
Oh yeah.
So I think if you look atAirtasker being a really high
operating leverage business youhave in Australia, you've built
this software technologyplatform.
We've got a marketplace thatsits on top and spits out,
generates a lot of cash.
Now we're going to the UK andwe don't actually have to
replicate those fixed costsagain.
The software doesn't need to bereplicated, we're just going to
replicate the marketing.
(05:57):
And so, you know, as we go toeach country, it's really about
working out how do we find alocal partner who can invest in
and turbocharge our growth inthat market.
So you know, in the UK we're,you know, going to be expanding
our partnership strategy andthen, of course, in the US,
where we are right now is beingsuper disciplined about staying
(06:19):
cash flow.
You know very disciplined inhow we invest and you know we've
been very open about lookingfor a media partner over in the
US.
And, you know, no news to shareright now.
Andrew Musgrave (06:30):
All right, but with every expansion comes
challenges, of course.
So what are some of the biggesthurdles you've come across
going into those new markets inthe UK and the US, and how have
you addressed them?
Tim Fung (06:42):
So I think the thing about launching into new
countries for Airtasker is wedon't actually have to replicate
any operations, and I'm verythankful for that, because you
know, if you compare it to, say,a company that's building data
centers or building restaurantsor something like that huge
fixed costs, huge sort ofone-way doors that you got to
walk through, For AirTasker it'svery much just a sales and
(07:03):
marketing effort into each ofthose markets, and the great
thing about that is that'spredominantly variable cost.
If you need to tune it down,you can tune it down, as we've
done over the last two years.
But when you're ready to tuneit up, oh boy, you can really
really start to go.
And so the biggest hurdle Ithink that we found is that when
(07:26):
you're building out a productthat is built on network effects
which AirTasker very much is,you know network effects you've
got to be big to be able tooffer value to your users so
that they can find the taskerthat suits them.
How do you quickly get from zeroto that and how do you bridge
that investment gap?
Because it does require aninvestment in marketing.
And so the big thing that wesort of worked out is we should
do this with local investmentpartners rather than trying to,
(07:49):
you know, raise all that capitalourselves and take all the risk
ourselves.
Why don't we share some of theupside with Channel 4 or another
media partner?
And by doing that we've workeda way to bridge that investment
gap and really, really excitedabout that.
Andrew Musgrave (08:02):
Are there any other countries you're
potentially looking at to moveinto as well?
Tim Fung (08:13):
Yeah, look, I think the great thing about a business
model like Airtasker is thatevery country needs an Airtasker
, and what I mean by that isthat we don't offer the specific
services we don't define thatIn Australia there's a bit more
barbecue cleaning, In the USthere's a little bit more snow
shoveling, and in the UK I don'tknow there's probably tea
drinking or something I don'tknow.
But in every different countryyou might have slightly
different use cases.
But Airtask is kind of aplatform and we are very much
(08:37):
like hey, everyone needs a placewhere they can ask for
something to be done, andeveryone needs a place where you
can earn money by doing stufffor people.
And so I think literally wethink that there should be an
Airtasker in every singlecountry, and that's why we're so
excited about finding thismodel, which scales at a local
level through local mediapartnerships.
Andrew Musgrave (08:58):
Are there any competitors in other countries
to this sort of platform?
Tim Fung (09:02):
There are a lot of these folks that sort of started
with the Yellow Pages and saidoh, you know, to the local
plumber you used to pay $100 tothe yellow pages.
Why don't you come up, pay $100to me and I'll give you the
digital version of the yellowpages?
So in Australia you've gotthings like Hi Pages where you
know you can pay a hundred bucksand you know be listed in Hi
Pages.
In the US you have a companycalled Thumbtack or Angie's List
(09:26):
, which is q uite well known.
So there's a lot of these sortof like yellow pages 2.0 type
models.
But in terms of being ane-commerce platform where you
pay through the marketplaceplatform like you do with, say,
uber or Airbnb, there reallyisn't anyone who's sort of gone
out there and built anything ofmuch scale.
So you know that's a two-sidedproblem.
(09:46):
In one sense it's great becausethe ocean is so blue, that the
field is so green and white, butthere is a job in educating the
market as well.
So you know that's the flipside of that coin.
Andrew Musgrave (09:58):
Certainly plenty of opportunity.
There's no doubt about that.
So I think let's just wrapthings up what are some of the
key milestones you're looking toachieve in the next sort of 12
to 18 months?
And just some final commentsfor the shareholders that might
be listening.
Tim Fung (10:12):
So we're absolutely committed this year to reaching
a full year free cash flowpositive and that's really at a
group level.
Whilst we're investing overseas, we're still going to be free
cash flow positive and we aim tocontinue that into FY25 and
beyond.
So this is a business thatdoesn't need to raise any
(10:36):
further capital in order to growand operate.
We really, over the last year,moderated our investment into
our brand and so we're going tobe reinvesting into our brand in
2025.
Really excited about thatbecause the Australian market is
far from mature.
You know, we think that we canbe growing this business at big
double digit percentage growthnumbers for the next 10 years
and then into the UK and the USand we're really doubling down
(10:58):
on our media partnerships andjust going to get them to scale,
you know, in a pretty turbogrowth trajectory.
Andrew Musgrave (11:06):
Well, I think it's fair to say the sky's the
limit at the moment.
So there's little competitionout there and plenty of
opportunity, not onlydomestically but offshore.
I'm sure it'll just grow fromstrength to strength.
So thanks for joining us in thestudio today.
It's been great to chat and welook forward to further updates
in the coming months.
Thanks so much for having me.
Great Thanks, Tim.
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