Airtasker sells 20pc UK stake to Channel Four in $6.5m advertising deal

Airtasker plans to replicate its Australian growth by selling a 20 per cent stake in its UK arm to a TV station for $6.5m worth of advertising.

Airtasker chief executive and co-founder Tim Fung.

Gig economy platform Airtasker has sold a 20 per cent stake in its UK arm for $6.5m under a plan which seeks to replicate a similar deal made with Seven West Media in 2016.

Shares in the company rose as much as 8 per cent on the news of the sale before settling up 5.41 per cent at 19.5c a share.

The 20 per cent stake was traded for $6.5m worth of advertising at Channel Four Television under a deal made through its investment arm, 4 Ventures

Airtasker co-founder and chief executive Tim Fung said he was confident his company could replicate a similar outcome to the Seven West Media deal he made in 2016, when the company gave away a 15 per cent stake of the business in exchange for contra advertising.

“What we learned from that is that we need to build trust in our audience and TV is still a really trusted media channel, there’s less spammy ads,” he said.

“The second thing we learned is that it allows you to get to scale really quickly. Being a network effect platform, Airtasker wants to build trust and get to scale really quickly.”

Seven West Media made an exit about five years later during an initial public offering at 65c per share.

“We effectively became a household name in Australia during that period and we increased our revenue 20 times. It turned out that Channel 7 made an exit during our IPO and they made about five times their money out of that,” Mr Fung said.

In Airtasker’s half-year results, it reported £400,000 ($747,000) in revenue from its UK arm, compared with $21.4m in the Australian business.

Mr Fung said Airtasker was feeling the pinch of the current economic conditions, and the platform did experience a period where the cost of tradies had skyrocketed.

“Over the past two years, there’s been a massive labour shortage and you would have paid an exorbitant amount to get a tradesperson or a helping hand. That’s subdued now and you can get a person at a reasonable price,” he said.

“We are now seeing a softening in consumer demand or foot traffic but we’re seeing that supply is at an all-time record level. The number of people looking to make money through flexible work has gone through the roof.”

The platform benefited from increased supply as those looking to make extra money often became customers, Mr Fung said.

“Customers and taskers aren’t two definitive or mutually exclusive groups of people, it’s just the same group of people playing different roles,” he said.

Airtasker was founded by Mr Fung and Jonathan Lui in 2012, beginning life as a mobile app where people advertised jobs – typically completed by tradesmen – up for auction.

The business launched the same year Uber came to Australia, when many gig economy businesses such as delivery platforms were in their infancy.

Airtasker quickly grew, becoming popular with tradies as well as home handymen and women who would put together Ikea furniture, fix leaky taps and mow lawns.

Mr Fung said there were a lot of similarities between Airtasker’s UK users and Australians, with cleaning, moving house, trades work and gardening the most popular services in both countries.

He also saw the odd hyper-local role, with some advertising their services as Prince Harry doubles.

Airtasker would seek to repurchase the stake from Channel Four in 2028 for scrip or cash.