Handy, the website and app for booking in-home visits by cleaners and handymen, has raised $50 million in a funding round led by Fidelity Investments.
The company, which is technically known as Handy Technologies Inc. and now based in New York, says it has booked 1 million home cleanings through its website and apps, and it boasts users can book a cleaning in a minute flat. With a total of $110 million now raised, the company also is spending to boost its brand, decking out entire subway cars with ads in New York City.
Oisin Hanrahan, the company’s chief executive, said the company sought Fidelity to lead its most recent funding round because of the help it could provide “scaling from a three-year-old business to a large public brand.” Hanrahan and co-founder Umang Dua met as students at Harvard Business School and started the company in 2012.
Previous Handy investors also provided funding in the round, including TPG Ventures, General Catalyst, Highland Capital and Revolution Growth, the company said. Hanrahan declined to comment about Handy’s valuation and whether or when the company would go public or seek additional funding.
Hanrahan said his company would continue to focus on the 33 locations it serves in the US, Canada, and Great Britain for the next six to eight months, growing its network of both cleaners and customers. With a larger network, it can fulfill appointments on short notice; in Boston, users typically need to book a slot 24 to 36 hours ahead of time, compared to four to five hours in New York, Hanrahan said. The company has also experimented with “surge pricing” to fill demand ahead of time, he added.
About 80 percent of Handy’s business is repeat customers, Hanrahan said, and 80 percent of the company’s revenue comes from cleaning services.
Like several startups that use independent contractors to complete their jobs, Handy has found itself in the crosshairs of workers who allege the company is dodging wage laws. In Massachusetts, a cleaner represented by lawyer Shannon Liss-Riordan alleged the company broke wage laws by paying her just $14 for 30 hours of work. The company is seeking to have the matter arbitrated out of the public courts, the docket for the case shows.
Hanrahan said the independent contractor model was good for Handy’s workers, however. He said 80 percent of cleaners use it for fewer than 20 hours per week, and than many took care of children and parents or used spare time for “upskilling.”
“When we imagined what this product would look like … we didn’t think about 1099 versus W2 versus another model,” he said, referring to tax forms issued to independent contractors and wage workers. “We thought about how we could deliver.”