Elance Inc and ODesk Corp have combined forces to establish a larger service for freelancers. The merger of the top two websites for freelance jobseekers will create platform with 8 million registered users.
In a joint statement issued today, Elance and ODesk said Elance Chief Executive Officer Fabio Rosati will be leading the merged firm. ODesk CEO Gary Swart will act as a strategic adviser. The name of the new company will only be announced once the deal has been closed. The statement did not give the terms of the merger.
The existing websites, odesk.com and elance.com, will continue to operate as two separate platforms.
Why, then, are we putting the two companies together?
According to Gary Swart, CEO of oDesk, in an email sent to its users, "the answer is pretty simple: we think we can do a better job this way. Both companies are inspired by a similar vision of delivering the best hiring and online work experience possible."
As more businesses go online, the two websites have become popular as they link employers to freelancers who want to work remotely, either from home or any other location without being committed to only one job. Citing data from Accenture, the report said 20% to 33% of the workforce in the US today is comprised of freelancers, contractors and temporary workers.
The report quoted Rosati as saying in an interview, "It's a market that hasn't really taken advantage of the migration to online and the innovations in e-commerce. By bringing the teams together, we feel we're in a much better position."
Rosati also revealed that the executive team and board of directors of the new firm will be made up with people from the two companies. The two websites will also remain open, with the company retaining its headquarters in Silicon Valley. Elance will continue to operate in Mountain View, California while ODesk will stay in Redwood City, California.
According to Swart, his desire to do something else was one of the motivations for the deal. He was quoted as saying in an interview, "As we got to know each other and came together, it was right at the time I was ready to step aside and do other things."
Investors Kleiner Perkins Caufield & Byers and New Enterprise Associates are two of the investors backing Elance. Meanwhile, T. Rowe Price Group Inc, Benchmark and Sigma Partners are some of the investors behind ODesk, the report said.
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