Spare5 seems to have struck a chord with its platform that pays people to spend their spare time performing short tasks on a smartphone.
Founded less than a year ago, the Seattle-based startup today announced a $10 million Series A round led by Madrona Venture Group, Foundry Group, and New Enterprise Associates. The fresh funding comes after the company raised a $3.25 million seed round this past December from the same investors.
Spare5, the first startup born out of a incubator at Madrona called Madrona Venture Labs, enables everyday people to perform short tasks on their smartphone — like photo tagging, price guessing, and simple surveys — in exchange for payment.
Spare5 makes money by charging one-time or monthly fees to e-commerce companies who use the platform to have work completed by screened candidates who must take a questionnaire and are graded by an algorithm after each task.
Customers of Spare5 come from a wide variety of industries and use cases. For example, Getty Images uses the platform to improve subjective descriptions, relevant keywords, and SEO for its photos. Groupon, meanwhile, asks Spare5 users — also known as “Fives” — to help update metadata on merchant listings. Other customers include United Way, which uses Spare5 to improve its data on King County demographics, and Sentient Technologies, which bolsters its machine learning algorithms by giving Spare5 users small tasks.
In the past ten months, Spare5 CEO Matt Bencke said his company’s original mission of allowing people to make money in their spare time and helping companies solve big data problems still holds true.
“What we’ve learned is that it’s not a crazy mission,” Bencke told GeekWire. “With the right micro-task platform, we can really do both.”
Some studies estimate that Americans now spend almost five hours a day on their smartphone, with a majority of that time using apps. The idea with Spare5 is to help qualified people use part of that time to make money by giving them easy, video-game like projects that can be completed while they sit in line for their latte, or during that 45 minutes on the bus home from work.
As they get more experience, users — who typically make between 2 and 60 cents for each job — have access to more and higher-level opportunities.
“The community is really engaged,” Bencke said. “They seem to enjoy spending free moments with Spare5.”
Whereas other new on-demand jobs with companies like Uber or TaskRabbit may offer more income, Bencke noted that he doesn’t see Spare5 as a replacement for someone’s full-time job, but rather a “fun way to spend time.”
“I think of our competition as Candy Crush or checking your favorite social network for the 50th time today than I do about other ways to supplement income,” he added.
As far as direct competition, Bencke called Spare5 a “relatively unique player.” He pointed to Amazon Mechanical Turk and CrowdFlower as platforms doing something similar, but described them “crowdsourcing V-1 services.”
“Spare5 has the advantage of coming in and seeing what they’ve done well and where they are limited,” Bencke said. “We’ve come in with a community-based approach that is mobile-first and has our own intelligent micro-task platform with our own proprietary-quality algorithm.”
Spare5, which has since graduated from Madrona Venture Labs, will use the new funding to grow its customer-facing team, while continuing to build out its technology platform. The company employs 13, which includes an impressive founding team: CTO Daryn Nakhuda, a former CTO at TeachStreet and Director of Engineer at Porch; Patrick O’Donnell, co-founder of Urbanspoon; and Matt Shobe, co-founder of Feedburner.
Bencke, another co-founder who was formerly a senior vice president at Getty Images, said he’s having the “time of his life.”
“I was always a startup guy inside a big company, starting new products or businesses or trying to turn them around and shake them up,” said Bencke, also a veteran of Microsoft and Boeing. “But it’s intoxicating to do it from scratch at a startup. The velocity is so much faster.”