Angi, the “Uber of home services”, shows signs of a turnaround
If our renovation skills are as good as our cooking skills, Angi, the “Uber for home services” may be in luck.
The company has been an interesting story for many years yet its stock returns have been a disappointment. But with new product iterations, management team, and name, the company may finally be turning it around.
A real fixer-upper
Angi (previously Angie’s List) came under fire in 2019 after the Consumer Federation of America found it manipulating reviews and favoring companies advertising with the site.
In need of a fresh image, the company appointed a new CEO, rebranded from Angie’s List to Angi and improved its business model:
- Angi used to be a listing site similar to Kijiji – allowing customers to browse contractors and negotiate project costs on their own.
- Today, Angi’s model is similar to Uber’s – prices are set directly on the site and payments are handled in-app.
The simplicity of a home services Uber-like model brought in new users and drove sales – welcome news for a company that’s struggled to turn a profit in its 25-year history.
On-demand is in demand
Angi’s new feature is showing signs of success – customers are turning to on-demand services instead of listings, and it’s boosting sales which increased 21% in August – the highest since April.
The company facilitated more than 30m projects using over 250k home service professionals last year – with the number of service professionals using Angi growing every month in 2021. Market conditions are prime for Angi as well.
- US sales of home improvement materials grew 13% last year.
- Angi’s target demographic, Millennials, now make up the largest share of home buyers – with 44% planning to invest over $50k into their new home.
Investors: How solid is Angi’s foundation?
Angi is up 10% after announcing its strong August sales, but its longer term trend tells a different story. The company is only up 15% over the last five years, and the competition is threatening to keep it that way:
- In late 2020, Facebook announced plans to let users book services through its app – sending Angi’s stock down 10%.
- Thumbtack, another home services platform, recently added the same on-demand features as Angi – and its latest funding round values it at $3.2b.
Sustained growth is far from guaranteed for Angi. With competition heating up in the $400b home services market, Angi will have to prove one-click home services demand wasn’t a by-product of the pandemic.