Elance Merges With ODesk to Boost Service for Freelancers

Elance Inc. and ODesk Corp., two of the top websites that help freelancers to find jobs, are merging to create a service with a total of 8 million registered individuals.

Fabio Rosati, chief executive officer of Elance, will lead the combined company, according to a joint statement today. The new entity’s name will be announced after the deal closes. Terms of the deal between the startups weren’t disclosed.

With more businesses moving to the Web, Elance and ODesk have gained popularity by linking employers with freelancers who want to work from home or other remote locations without being tied to a single job. Freelancers, contractors and temporary workers account for 20 percent to 33 percent of today’s U.S. workforce, according to a report this year from Accenture Plc.

“It’s a market that hasn’t really taken advantage of the migration to online and the innovations in e-commerce,” Rosati said in an interview. “By bringing the teams together, we feel we’re in a much better position.”

Rosati said the executive team and board will be balanced with people from each company. Both websites will stay open, and the company will keep both Silicon Valley headquarters, with ODesk in Redwood City, California, and Elance in Mountain View, California.

Moving On

ODesk CEO Gary Swart, who will become a strategic adviser, said one impetus for the deal was his desire to do something else. Swart joined the company in 2005 and helped start its jobs marketplace the following year.

“As we got to know each other and came together, it was right at the time I was ready to step aside and do other things,” Swart said in an interview.

Founded in 2000, Elance sold its original business in 2005 and opened the marketplace two years later.

ODesk has almost 5 million registered freelancers, compared with 3 million for Elance, according to the joint statement. A total of 2 million businesses are also signed up.

Elance, backed by investors including Kleiner Perkins Caufield & Byers and New Enterprise Associates, raised $16 million in January 2012. ODesk raised $15 million two months later from backers including T. Rowe Price Group Inc., Benchmark and Sigma Partners.

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