TaskU’s IPO Pop to Nasdaq valued corporations at $ 2.eight billion
TaskUs co-founders Bryce Maddock (left) and Jaspar Weir
Bryce Maddock and Jaspar Weir’s journey to Nasdaq began in high school in Southern California, led through an entertainment project for high school kids and a failed yogurt business in Argentina, and ended up in a Texas city that was mostly for theirs. famous is historical water park.
Maddock and Weir are now in their mid-30s, each valued at approximately $ 400 million and run a company with 27,500 employees worldwide. Thirteen years after investing their savings in a company called TaskUs, the company debuted Friday and is valued at approximately $ 2.8 billion. Its stock, which trades under the ticker symbol “TASK,” rose 26% to $ 29.
TaskUs provides customer support services for fast growing technology companies like Uber, Netflix, Coinbase and Zoom. Employees are spread across eight countries, and TaskUs has hundreds or even thousands of staff available to its top customers to handle all of their support issues. Revenue rose 33% to $ 478 million last year, and TaskUs is profitable – a rarity among newly listed tech companies – with annual net income of $ 34.5 million last year.
Maddock, the CEO, said TaskUs most often served companies that “realize that their growth will be so aggressive that they can no longer do everything themselves.”
For example, Zoom called in early 2020 when the video chat company’s pandemic growth triggered a thirty-fold increase in support requests, according to the pre-IPO online roadshow. TaskUs soon had 700 employees working on the account.
Customers like Zoom are the reason Maddock and Weir, the company’s president, went to Nasdaq on Friday to ring the closing bell. But the trajectory wasn’t always up and to the right.
Summer parties in high school
Maddock and Weir became best friends two decades ago when they attended Santa Monica High School, just blocks from one of California’s most famous beaches. Weir stayed nearby to study at the University of Southern California while Maddock went cross-country to New York University.
Still, they put their heads and purses together and started their first business, an entertainment agency that rented out venues in Los Angeles and hosted non-alcoholic parties for high school kids.
“We grew up in Los Angeles and found that high school kids don’t have much to do in the summer,” Maddock said in an interview. They named the business Club Access and ran it from 2005 to 2007, attracting an average of 800 to 1,000 children on Monday nights.
After college, they decided to give Buenos Aires a chance. Weir had studied abroad in Argentina and wanted to start a business there. He and Maddock decided to open a frozen yogurt shop. They flew down together and met investors as well as chemists who could mix the flavors. However, they quickly realized that starting a small business in Argentina and earning pesos were not a way of building wealth, and they gave up on the idea before it got off the ground.
They moved back in with their parents and invested the $ 20,000 they saved from the events business in their next business: a task-based virtual assistant. They decided to start in the Philippines, one of the world’s leading countries for call centers and outsourcing.
“We used our combined life savings to rent a one-room office on the edge of a freeway an hour south of Manila and hire our first employees,” they wrote in the letter to the prospectus founders.
In their first conversations with startups, Maddock and Weir said they quickly realized that busy executives didn’t want task-based help but needed more comprehensive support services to help them grow. TaskUs has expanded its focus to other business processes and the founders have brought some venture capital financed start-ups on board.
“When we gained their trust, we took on more critical parts of their operations, such as advanced technical support and critical content review,” they wrote.
By 2012, TaskUs was well established enough to land on Uber’s radar, which was still in the early stages of its development, although it was expanding rapidly and taking on large rounds of ventures. Maddock said the message from Uber when it first met in San Francisco was that the driver service company would never outsource its services. That changed completely in the following year.
“They called us back and said outsourcing now sounds like a good idea,” said Maddock.
TaskUs began working with Uber in 2013, reviewing and integrating drivers according to the prospectus. In 2014 it started helping with driver and driver support. A year later, TaskUs had more than 2,000 people committed to Uber.
Similarly, TaskUs started working with Coinbase when demand increased. That was in 2017 when “Bitcoin became a mainstream obsession and the volume of support skyrocketed,” the filing reads. Over time, TaskUs began handling fraud, compliance, and customer security requirements for Coinbase.
The Philippines remains the company’s largest hub, with more than 19,000 or 70% of the workforce there. The USA is the second largest country with over 4,000 employees, followed by India and Mexico.
TaskUs was originally headquartered in Santa Monica, but moved to Texas in 2016 with the opening of an office in San Antonio and then to nearby New Braunfels, which became today’s headquarters. New Braunfels is home to the Schlitterbahn, a 42-year-old water park that covers over 70 hectares and is one of the largest employers in the city of 80,000.
Schlitterbahn Waterpark and Resort in New Braunfels, Texas.
Erich Schlegel | Getty Images
Maddock and Weir both live in Austin, about 50 miles north of New Braunfels. Before the pandemic, they spent about 75% of their time traveling to their various offices, including six to eight trips a year to the Philippines.
They’re eager to get back on the streets and in the air, despite being key figures in a publicly traded company with insurance policies that “prohibit us from traveling on the same plane,” Maddock said.
In addition to Maddock and Weir, TaskUs’ IPO is a huge godsend for Blackstone Group, which invested around $ 250 million in 2018 and ultimately controlled about two-thirds of the company. Including the shares sold in the IPO, that proportion is now around $ 1.7 billion.
Maddock and Weir were each able to hold a sizable stake – 16% at the time of going public – because they had only raised $ 15 million in debt prior to the Blackstone deal.
“We started the business for seven years and lived with our parents on a tight budget,” Weir said in an interview. “Fortunately, our parents didn’t charge us any rent.”
Unlike a typical venture capital backed tech company, TaskUs didn’t issue traditional stock options to its employees as it was originally structured as a limited liability company. Instead, it created a “phantom stock plan” in 2015 and made grants that would increase in value as the company met milestones and liquidity events.
Maddock said the company paid out $ 44 million to over 200 employees who owned phantom stocks following the Blackstone deal in 2018. After the IPO, he said it will pay out over $ 120 million in total to more than 400 employees.
“We have teammates and executives in the Philippines who make hundreds of thousands and in some cases over a million dollars,” said Maddock.
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