YouDo.com, a platform that matches people requesting and providing day-to-day services, has raised $17 million in an equity funding round led by mobile operator MTS, as reported by the business daily Kommersant.
MTS put $12 million on the table, while undisclosed amounts were brought by Sistema Venture Capital (one of the investment vehicles of Sistema, a conglomerate that controls MTS), Flint Capital and United Capital Partners (UCP), as well as individual investors Sergey Solonin and Alexander Kabakov.
YouDo.com indicated that it will use the funds raised for its geographic expansion, the launch of new service categories, marketing campaigns, and further service automation.
Virtually unknown outside Russia, YouDo.com has a strong traction on the local market. As reported by Kommersant, YouDo.com currently claims 5 million registered users, including more than 800,000 verified service providers. The service generates nearly 6,000 transactions per day, with last year’s turnover reaching nearly 4 billion rubles.
The site presents itself to users in a very simple way, as a place to solve all manner of practical problems — from computer repair to translations to housekeeping, and thousands of other fields of activities.
Yet beneath this surface is a technologically-sophisticated platform, which founder Alex Gidirim claims can “disrupt the classifieds market,” “change the way people search for services and even goods,” and “contribute to the emergence of the labor market of the future.”
YouDo.com uses artificial intelligence at its core. Machine learning is used in practically all areas of operation, from creating tasks to matching users and service providers to checking comments and verifying users, said Gidirim in a previous exchange with East-West Digital News.
“In the traditional model, if a user chooses the wrong subcategory when creating a task, a moderator has to correct it manually. This consumes resources and has a negative impact on user conversion. In our new system, a neural network automatically determines the subcategory from the name of a task by meaning, not just by keywords,” explained Gidirim.
What’s more, a Big Data approach is used for identifying spurious comments and suspicious users as well as for checking providers during the implementation of tasks.
“You can’t fight fraud in large systems without automation and machine learning,” Gidirim said.
Early believers and early investors
The story of this startup has not always been rosy.
“At the early stages, in 2012-2013, I developed the project as a believer, since the deep tech we prepared was not in demand. We had to evangelize and create our own ecosystem around our solution,” recalled Gidirim.
But the company chugged along, fine-tuning its technology features and business model while patiently waiting until its marketplace concepts finally captured customers’ and investors’ attention.
In 2016 the platform at length got some significant traction, boasting more than 61,000 average monthly published tasks. That same year YouDo.com raised $6.2 million from Sistema Venture Capital, following earlier smaller capital injections coming from Flint Capital, United Capital Partners and Sergey Solonin.
In December 2017, Apple distinguished the YouDo app among the best of the year.
Domestic competition and international prospects
Yet competition is strong. One source is Avito: this leading classifieds platform was launched in 2007 by Swedish entrepreneurs and acquired in 2015 by Naspers. As a classifieds site, however, Avito is technically not the same as YouDo.com, which can match service seekers with providers immediately.
Among YouDo.com’s other domestic competitors are mono-vertical players, including vezetvsem.ru (trucking), qlean.ru (cleaning), remontnik.ru (home improvements).
The closest international analog of YouDo.com is Task Rabbit. This US marketplace — which was acquired by IKEA in September 2017 — matches freelance labor with local demand.
Expansion beyond Russian territory is also being considered in the middle or long term by Gidirim. “Our concept has potential as disruptive as that of Airbnb and Blablacar in their respective fields,” he believes.
