ANGI Homeservices (ANGI) announced yesterday that it will
acquire rival Handy Technologies, which is an on-demand platform and gig
marketplace that pairs people seeking
household services with pre-screened handyman professionals at a fixed price.
Terms of the acquisition deal were not disclosed.
The core mission of ANGI Homeservices is to help homeowners connect with home service professionals for home repair, maintenance, and improvement projects. Its platform helps consumers connect with local, pre-screened professionals, enabling them to instantly book appointments with those professionals online. Its portfolio of digital home service brands includes HomeAdvisor and Angie's List, and now it will add Handy to its portfolio.
ANGI Homeservices is a fairly new company that was created when IAC (IAC) acquired Angie's List in 2017 then merged it with its already-owned HomeAdvisor to create ANGI Homeservices. Angie's List had been struggling in the years leading up to that acquisition. While it had been around for more than 20 years, its subscription-based business model had difficulty competing with homeservice reviews sites that were free, including HomeAdvisor and Yelp.
Angie's List eventually dropped its subscription fee and moved to a freemium model. However, it was still struggling, and some questioned its ability to survive on its own as new tech companies entered the market and intensified competition in the sector, like Amazon Home Services, Facebook, Google, TaskRabbit, Handy, and Porch. ANGI had also been transitioning from being a recommendation platform to an on-demand marketplace where consumers can schedule jobs through the website.
Many see homeservices as having great untapped potential as 90% of home improvement jobs are still sourced offline. Business is mostly generated via word-of-mouth, but that's changing, and there is a lot of opportunity here to introduce efficiencies. Combining with HomeAdvisor allowed Angie's List to enlarge its scale quickly, allowing it to compete better against those big tech companies coming into the space.
Why buy Handy? Handy extends ANGI Homeservices' reach into the gig economy (labor market of short-term freelance jobs) space. Handy enables instant transactions across several on-demand categories, including home cleaning, product installation, and furniture assembly. Handy also has a nationwide retail partnership network that is designed to offer services to shoppers who need installation assistance following the purchase of home-related items from furniture to, ceiling fans.
In addition, Handy's nationwide gig worker network of service professionals can help meet ANGI Homeservices' unfulfilled consumer demand, expanding product breadth, reach, and consumer satisfaction. ANGI says its customers want to book and instantly buy all kinds of household services from ANGI, and with Handy, it can seamlessly deliver on more requests and do it faster. Handy gives ANGI a strong foothold in the gig economy space. Handy Co-Founder and CEO Oisin Hanrahan and COO and Co-Founder Umang Dua will remain with Handy in their current roles. The transaction is expected to close later this month.
In sum, this looks like a smart move for ANGI. It leads them into the gig economy in a bigger way, allows them to tap into Handy's relationships with retailers, and helps ANGI fill its own orders for handyman services. The stock is ticking only slightly higher on the news, but this seems to be a nice long term fit for ANGI.
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