This morning Freelancer made an announcement to the ASX that it has acquired the assets of Donanza, a similar service marketplace based out of Israel.
Donanza was founded in 2008 by Ami Dudu, Liran Kotzer, and Gil Pal, and aggregates and consolidates freelance jobs published across the web and matches them with over 360,000 freelancers it has in its database, based on criteria such as skill sets, expectations, and budgets. The company received $1 million in funding from Google Chairman Eric Schmidt’s Innovation Endeavours fund as well as other investors in 2011, but essentially folded in July 2014 due to running out of money and not being able to work out the ‘profit’ equation that businesses like these rely on.
Regional Director at Freelancer, Pete Cooper, said about the acquisition, “[Donanza] is a really nice fit for the business, [Donanza is] a services marketplace like Freelancer and although they had product market fit, they didn’t have the profitability equation solved, which Freelancer has solved, so it’s very efficient for us to load up those customers and make a special offer to onboard them.”
Freelancer now operates in over 247 countries and has over 14.6 million users. The Donanza technology will be rolled into the existing Freelancer platform.
None of the founding team will join the Freelancer team as part of this asset acquisition, in fact all have moved on to other businesses. The team has updated the current Donanza splash page with this morning’s news:
The funds for the purchase will come from existing cash reserves at Freelancer. Cooper has told Startup Daily that the integration of the technology into the platform has already begun. Even though Freelancer is a stand alone platform, the type of technology that Donanza had as an aggregator is a powerful new tool for the company.
Essentially it is not too dissimilar to the way in which job site Indeed works, which is one of the fastest growing companies in the world right now. It will be interesting to see how Matt Barrie, CEO of Freelancer, and his team will utilise it.