Outsized has closed an undisclosed Series A round led by Cape Town-based firm Knife Capital. CEO Johann van Nierken expounded more on the business and recent fundraising.
Talent-sourcing firm Outsized has announced the closing of its undisclosed Series A round led by Knife Capital. Other investors included Adrian Durham, founder of the global wealth management platform FNZ Group. The investment will be used to grow sales and engineering teams, expand in existing regions, and accelerate product development for both enterprise clients and independent talent.
Founded in 2016, Outsized offers enterprises access to a curated network of 25,000 vetted, independent professionals. Its AI-powered platforms claim to solve the pain point of companies in emerging markets having no place to access professional, highly skilled independent contractors.
“As a young firm, we’re already a key partner to a large number of management consulting firms and major enterprises. This funding is a game-changer, paving the way for new, innovative solutions for our clients and talent,” said Niclas Thelander, founder and CMO of Outsized.
For lead investor Knife Capital, Outsized’s strong unit economics and achievement of its growth targets was the motivating factor for backing the startup.
“The team has demonstrated that they can execute and do justice to the scale of the opportunity. Most of the future growth in the global freelance platform market will come from the very geographies and segments of the market where Outsized is already a leader, so the business is well poised,” said Keet van Zyl, co-founding partner at Knife Capital.
To get a further understanding of Outsized’s and how the investment will contribute towards the company’s growth aspirations, TechCabal had a quick chat with CEO Johann van Niekerk following the funding announcement.
Please expound on Outsized and the problem you are solving
JN: Many large employers are moving towards a model where they are making use of flexible resourcing or want to make use of flexible resourcing. But for each of them to have the capability and the capacity to source independent professionals, curate them, vet them, and deploy them is an enormous task. That’s where Outsized comes in.
In South Africa, for instance, when we started in 2018, most companies would have thought of employment in terms of permanent outsourcing and consulting. There were a couple of independent consultants floating around the market, but flexible outsourcing, as a business model and as a key part of acquiring talent was not there. And we saw this happening in other markets too.
So we started servicing this and the more clients started using it, the more interested they were. Then of course, COVID hit and once the dust had settled, it had opened the eyes of many employers that they could employ people on a remote basis. And if you can employ people on a remote basis, you can go for the best talent, regardless of where they are. So that’s the problem that we are solving. In many instances, the most logical choice is to put somebody on contract for a while and we make that viable and easy.
How big would you say this pain point is, especially in Africa?
JN: It is a $5 billion global market. To put a number in Africa would be difficult but we’re very bullish that we are catching this at the early stages. But what I would say is that it’s definitely in the hundreds of millions of dollars on the continent. The exciting part for us is exposing the talent that we have in our markets like Africa to developed markets like Europe, the US, and Australia.
What was the fundraising process like and where are the raised funds going to be invested?
JN: The process has been an illuminating one because it took a little bit longer than we anticipated. But I think on the counter to that was that Outsized has an established proposition that works. So we were in a position where we didn’t need the money but rather, we wanted the money to grow and to make a substantial difference in a shorter space of time, rather than just to carry on growing at an organic pace.
So we’re very happy with the outcome. We think we’ve got the right partners. We know that compared to other businesses that are effectively funded by the funds raised, we’re not, you know, we’re in a luxurious position. In terms of the deployment of the funds, there are three areas of focus for us; the supply, demand, and the market. So that’s really where we’re going to be spending the money very broadly in those three areas. So in terms of the demand, that is going to be in terms of enhancing our capabilities in terms of reaching clients in new sectors and geographies.
In terms of the marketplace, we will be fast-tracking our technology to bring more efficiency to it. Finally, in terms of supply, we have a lot of work that we want to do in terms of making Outsized the home for independent professionals. So we need to find them, meet them, service them. We already have thousands of them on the platform, but we want to 10x and even 100x that so that every independent contractor in the markets where we operate knows that Outsized is a great platform to be on. Additionally, we would like to introduce value-adding services for our freelancers like a community platform where they can engage with each other.
What’s next for Outsized?
JN: Outsized has several new products in the works, including new modules for enterprise clients and services for professional freelancers. The integration of AI technology into Outsized’s product offerings and core operations is already underway, enhancing the user experience for both clients and talent.
We are a business focused on growth markets and Africa is a big part of that. We are very keen to explore opportunities and have certainly done some work outside of South Africa and other places in Africa, but not where we would like it to be. So with the new resources that we have, and with the work that we’re doing, we will definitely be doubling down on that.