Microtask, a Finnish startup, has just closed a round of seed financing lead by Danish Sunstone Capital followed by a group of Angel investors (see list below). The size of the round is undisclosed, but the company told us that they should be able to get to summer 2011 with it. The round is their second seed round and it's structured as more and more financing rounds nowadays are: It's a seed round that's lead by a VC who has also committed to lead the A round next spring. Why do a VC come in so early in with a group of Angels? Because they want to make sure the Super Angels with minifunds are not eating their lunch, that's why. Even though Microtask news is positive and there exists hardly any threatening Super Angels in the Nordics, there is a lot of debate and tension about the general phenomena elsewhere. These tensions seem to be especially true in the US, where there's more investors battling for the best deals.
All the drama aside, if nothing else Microtask got one of the better investors in the region. Nikolaj Nyholm of Sunstone will be joining their board. Nyholm belongs to the group of investors who have been on startup side of the table more than once and understands young startups better than most.
Microtask focuses on creating technologies that turn digital labor into a standardized commodity. They could for example work on digitalization and annotation of archives, verification of forms and user-generated content, speech transcription and validation of results of computer analysis. Anything that's menial, repetitive and boring.
Here's roughly the process:
1. Break down work into millions of tiny tasks
2. Distribute them over the net to a larger number of people
3. Verify the result, and return them to the customer
It's a SaaS model that enable more efficient working that is paid for the results, not by the hour. Microtask breaks the more mundane tasks into tasks for the social web to take care of and then channels those back to their own customers. Demand media uses similar logic with content creation, and their process is perfected to the point of art. In Microtask's case think of it as instead of outsourcing the work to China, you'd outsource it to Farmville. Microtask is much like Amazon's Mechanical Turk, except they claim to be able to handle higher volume and the price per independent unit of labor is much smaller. They get their revenue by breaking the tasks into stardardized pieces for their channel to handle and facilitating the completed quality assured work back to their customers.
Microtask is a 2009 founded startup, which has currently 10 employees and an offices in Tampere (FI), Helsinki (FI) and San Francisco (US). It's owned by its founders Ville Miettinen, Harri Holopainen (CEO), Panu Wilska and Otto Chrons, Finnish Vigo accelerators Lots, Sunstone Capital and a group of private Angel investors. The Angels include Paul Bragiel, Serial entrepreneur from San Francisco, Founder of Meetro, Lefora & I/O Ventures; Borgar Ljosland, Founder and ex-CEO of Falanx Microsystems (exited to ARM in 2006), Founder and CEO of FXI Technologies; Harri Hursti, IT security expert, author of the "Hursti Hack" and recipient of the EFF Pioneer Award; Ari Hyppönen, ex-CTO and board member at F-Secure Corp (NASDAQ OMX:FSC); Kaj and Mika Tuomi, Petri Nordlund (Founders of Bitboys, acquired by ATI in 2006) and Pekka Pättiniemi, CEO of Banco Santander in Finland. Pättiniemi is also a Microtask board member.
Three of the founders, Miettinen, Holopainen and Wilska, were together at Hyprid Graphics, which was sold to NVIDIA Corporation for € 30 million in 2006. Otto Chrons on his part was the founder and CEO of Ionific, which was later sold to Sasken in 2006.
The company is still pre-revenue, but it's optimistic about the prospects and hopes to see the first revenues during the fall 2010. If they are ready to take on the market so are their competitors. CrowdFlower, CloudCrowd, HumanGrid each have closed roughly a € 3 million Series A. The market is clearly getting created fast and can develop into a very lucrative one once the models evolve into working processes and the clients and channel partners get familiar with the model.