Home services company Thumbtack is thriving even as the real estate market stays slow

While home sales and remodeling rates remain low, Thumbtack—which connects homeowners with professionals to do work on their houses—says business is booming.

In fiscal 2024, Thumbtack saw revenue of $400 million, up 27% from the previous year, with billions of dollars going to the roughly 300,000 small businesses that book work through the platform. Cofounder and CEO Marco Zappacosta attributes the company’s success to more than 15 years of work helping users find the right, trustworthy professional—even if they’re not entirely sure what they need to fix a problem in their home—bolstered by recent advances in artificial intelligence.

“You’ve got to remember this is, on average, a $1,000 purchase,” Zappacosta says. “It’s not something you do casually.”

Zappacosta believes it’s inevitable that the vast majority of home maintenance and remodeling bookings will ultimately move online, similar to the travel and transportation industries. What sets this industry apart, however, is the sheer number of service types—Thumbtack lists professionals in about 500 different categories, from ceramic tile installation to black mold remediation.

To help users understand what’s available and how services match their needs, the company has offered an AI-powered search feature since last year. It allows users to describe home issues in plain language, rather than rely on keyword searches or Yellow Pages-style lookups for terms like “plumber” or “electrician.” Thumbtack is also testing an AI feature that lets users upload photos of home issues, such as a leak through the ceiling, to get help finding the right professional.

As AI grows more powerful, it can help transform the experience of booking home services from a traditional internet search into something more like a conversation with a savvy neighbor, Zappacosta suggests.

“The opportunity that AI creates for our business is at any point in the process, if you have a question or concern, or if you have to make a decision, we can arm you with the relevant context to help you evaluate that and confidently take action,” he says.

Even before the rise of large language models, the company offered a collection of home project guides, including advice to help people decide when to tackle a task themselves and when to hire an expert. Alongside reminders of scheduled work and tools to rebook trusted pros, the Thumbtack app also provides customized guidance on when to perform various maintenance tasks—guidance Zappacosta suggests will only improve as AI systems advance and the company gathers more data about users, their homes, and their needs.

AI can also likely help professionals optimize their use of Thumbtack, Zappacosta says, enabling them to better configure platform features to find sales leads suited to their businesses.

“The focus on pros is always how we can provide them more consistent value,” he says.

Thumbtack’s technical edge, says Sequoia Capital partner and Thumbtack board member Bryan Schreier, gives the company a strong chance of becoming the go-to platform for home services—akin to Uber for ride-hailing or DoorDash for delivery.

“Owning a home is complex, and so I think it’s just taken a while to deliver the technical achievement that is required to become the Uber of the home services space, because it is so complex,” Schreier says. “In the last couple of years, in terms of its growth and profitability, I think the secret behind [Thumbtack’s] emergence is the fact that they have cracked the technological nut behind what had been holding back a company from becoming the Uber of the home services space until now.”

In parallel with its AI efforts, Thumbtack has forged partnerships with other online platforms, including providing search results for home improvement-related terms on Nextdoor. The company was also recently featured in an Amazon preview of upcoming AI enhancements for Alexa, which would be able to book professionals on users’ behalf. These partnerships now account for 10% of Thumbtack’s annual revenue and help deliver its services to users even if they don’t visit the site directly.

“Hiring pros and dealing with your home is a huge activity—it happens in a ton of places on the internet,” says Zappacosta. “And increasingly, platforms are utilizing us as the best way to fulfill a homeowner’s hiring needs.”

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