TaskUs IPO on the Nasdaq values the company at $ 2.8 billion
TaskUs co-founders Bryce Maddock (left) and Jaspar Weir
For Bryce Maddock and Jaspar Weir, the trip to Nasdaq started in high school in Southern California, continued through a high school entertainment business and a bankrupt yogurt business in Argentina, and eventually ended up in a Texas town best known for its historic water park .
Now in their mid-thirties, Maddock and Weir are each worth around $ 400 million and oversee a company with 27,500 employees worldwide. Thirteen years after investing their savings in a company called TaskUs, the company held its debut on the stock market Friday, and is valued at around $ 2.8 billion. The stock, traded under the symbol “TASK,” jumped 26% to $ 29.
TaskUs provides customer support services to fast growing technology companies, including Uber, Netflix, Coinbase and Zoom. Employees are spread across eight countries, and TaskUs dedicates hundreds or even thousands of employees to its core customers so that it can handle all of their support-related issues. Returned climbed 33% last year to $ 478 million, and TaskUs is profitable – a rarity among newly listed tech companies – posting annual net income of $ 34.5 million last year.
Maddock, CEO, says TaskUs is most often at the service of companies that “realize that their growth is going to be so aggressive that they can no longer do it all on their own.”
For example, Zoom called in early 2020, when the pandemic-fueled growth of the video chat company spurred a 30-fold increase in support requests, according to the online roadshow. TaskUs soon had 700 employees working on the account.
Clients like Zoom are the reason Maddock and Weir, the chairman of the company, visited the Nasdaq on Friday to ring the closing bell. But the trajectory was not always up and to the right.
Maddock and Weir became best friends two decades ago while attending high school in Santa Monica, a few blocks from one of California’s most famous beaches. Weir stayed nearby to study at the University of Southern California, while Maddock crossed the country on his way to New York University.
Still, they put their heads and wallets together and formed their first business, an entertainment agency that rented venues around Los Angeles and threw alcohol-free parties for high school kids.
“We grew up in Los Angeles and one thing we realized is that in the summer the kids in high school don’t have much to do,” Maddock said in an interview. They called it Club Access and ran the business from 2005 to 2007, attracting an average of 800 to 1,000 kids on Monday nights.
After college they decided to give Buenos Aires a shot. Weir had studied abroad in Argentina and wanted to start a business there. He and Maddock decided to start a frozen yogurt store. They took to the skies together and met investors as well as chemists capable of mixing flavors. However, they quickly learned that opening a small business in Argentina and earning pesos was no way to build wealth, and they gave up on the idea before it took off.
They returned to live with their parents and invested the $ 20,000 they had saved through the event activity in their next business: a task-based virtual assistant. They chose to start in the Philippines, one of the best countries in the world for call centers and outsourcing.
“We used our combined savings to rent a one-room freeway office an hour south of Manila and hire our first employees,” they wrote in the founders letter portion of the flyer.
In their first conversations with start-ups, Maddock and Weir said they quickly realized that busy executives don’t want task-based help, but instead need more comprehensive support services to help them as they go. and as they grow. TaskUs has broadened its reach to cover more business processes, and the founders have incorporated start-ups backed by companies.
“As we built their trust, we took over more critical parts of their operations, such as advanced technical support and critical content review,” they wrote.
By 2012, TaskUs was established enough to hit the radar of Uber, which was still in its early stages of development, albeit expanding rapidly and raising big rounds of venture capital. Maddock said Uber’s message at the first meeting in San Francisco was that the rideshare company would never outsource its services. That changed completely the following year.
“They called us back and said outsourcing seemed like a good idea now,” Maddock said.
TaskUs started working with Uber in 2013, reviewing and integrating drivers, according to the prospectus. In 2014, he started helping out with pilot and driver support. A year later, TaskUs had over 2,000 people dedicated to Uber.
Likewise, TaskUs started working with Coinbase while the demand started to increase. It was in 2017, when “bitcoin became a mainstream obsession and support volumes skyrocketed,” the file says. Over time, TaskUs began to manage fraud, compliance, and customer security needs for Coinbase.
The Philippines remains the company’s largest hub, with more than 19,000, or 70% of its employees, based there. The United States is its second largest country, with more than 4,000 employees, followed by India and Mexico.
TaskUs was originally headquartered in Santa Monica, but began moving to Texas in 2016 with the opening of an office in San Antonio, then near New Braunfels, which became its current headquarters. New Braunfels is home to the Schlitterbahn, a 42-year-old water park that covers more than 70 acres and is one of the city’s largest employers of 80,000 people.
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 said they spent around 75% of their time traveling to their various offices, including six to eight trips a year to the Philippines.
They are eager to get back on the road and in the air, although as key people in a publicly traded company they have insurance policies that “prohibit us from traveling on the same plane,” Maddock said. .
Besides Maddock and Weir, the IPO of TaskUs is a godsend for Blackstone Group, that Iinvested around $ 250 million in 2018 and ultimately controlled around two-thirds of the company. Including the shares sold during the IPO, that stake is now worth around $ 1.7 billion.
Maddock and Weir were each able to retain a substantial stake – 16% at the time of the IPO – because they had taken only $ 15 million in outside funding before the Blackstone deal.
“We started the business for seven years, living on a shoestring with our parents,” Weir said in an interview. “Fortunately, our parents didn’t charge us rent.”
Unlike the typical tech company funded by venture capital, TaskUs did not issue traditional stock options to its employees, as it was originally structured as a limited liability company. Instead, he created a “shadow share plan” in 2015 and handed out grants that would rise in value as the company hit milestones and liquidity events.
Maddock said that following the Blackstone transaction in 2018, the company paid $ 44 million to more than 200 employees, who owned phantom shares. After the IPO, he said a total of more than $ 120 million will be paid to more than 400 employees.
“We have teammates and leaders in the Philippines who will earn hundreds of thousands and in some cases over a million dollars,” Maddock said.