HomeAdvisor powered by Angi

The home improvement giant wins big through economic shocks

In 2020, Americans spent a good amount of time at home. This spurred projects such as as sourdough baking, puzzle completion, and scrambling to turn corners of the home into a suitable background for zoom meetings. Indeed, while cooped up during the COVID-19 pandemic, many Americans decided it was time for a home remodeling project. As Rachel White, the chief executive of Byggmeister Design-Build, put it to the Boston Globe, “The pandemic has sort of been a tipping point for people… [they] are in their homes 24/7, with their entire family, and things that may have bothered them but were in the background have really become front and center.” As a result, as COVID restrictions loosened homeowners turned to platforms such as HomeAdvisor powered by Angi to take on remodeling tasks both big and small. 

HomeAdvisor, which was founded in 1998 and acquired by parent company InterActiveCorp (IAC) in 2007, merged with Angie’s list in 2017 when IAC acquired the latter company as well. HomeAdvisor powered by Angi (hereafter HomeAdvisor) is a two-sided business platform that connects home service providers with (mostly) homeowners looking to complete home-improvement tasks but don’t have the skills or desire to complete them themselves. One one side of the market, HomeAdvisor creates value by offering customers a way to locate, vet via reviews, compare prices between, and schedule appointments with home service providers such as painters, landscapers, plumbers, builders, and the like. On the other side of the market, HomeAdvisor creates a central platform on which home service providers can advertise their services, and connects them to clients who may otherwise never have found them. Entrepreneurs and small business owners often need to be jacks-of-all-trades and handle not only service provision but also marketing and other business administration. HomeAdvisor supports with marketing, and can even help providers price their services accurately and competitively. 

HomeAdvisor and similar platforms such as Thumbtack and Houzz are interesting for their sustainability and scale even in times of economic downturn. Even as the housing market crashed in 2008 the home improvement market grew steadily: the homeownership rate in the United States has remained stable at around 65% for decades, and one can easily see the economic potential in the home improvement business given that there are 127 million owner-occupied housing units in the US, and the average home improvement spend is $10,341 (Mischa Fisher, Chief Economist at Angi, public lecture 2022). While the platform is free to use, HomeAdvisor captures value by charging service providers a fee for qualified leads for home improvement jobs. The platform was remarkably resilient to the shock of the COVID 19 pandemic and reported $1.5 billion in 2020 revenue – a growth of 11% from 2019. Given HomeAdvisor’s steady growth despite shocks and the expansive potential of the merger with Angi, it’s not difficult to imagine the company’s continued success. 


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Student comments on HomeAdvisor powered by Angi

  1. Great post, Julia! Thank you so much for sharing. Super interesting platform, and I agree with your conviction that the future seems bright for HomeAdvisor!

    I’m curious about the customer and service-provider experience. Does this allow service-providers to more effectively meet new clients? It seems like it, but I’m curious about multi-homing for service providers, and how HomeAdvisor compares to competitors in that regard! Thanks, Julia!

  2. HomeAdvisor sounds like a LinkedIn for contractors where they advertise their “jack-of-all-trades” skillsets. The support contractors receive with pricing sounds a lot like the ZBJ case and the challenges with disintermediation. Have you learned if HomeAdvisor has struggled with disintermediation? If they haven’t, do you think it’s because the jobs are smaller and less likely to require the same skill?

  3. Thanks for your thoughts and questions, Max and Stephen! Max, to your point, yes multi-homing is absolutely possible. As best I can tell HomeAdvisor keeps itself competitive with other platforms by charging a set fee for qualified leads, rather than a commission fee on work completed. I think the greatest risk to HomeAdvisor’s business model is disintermediation. I’ve personally disintermediated on the platform, finding a painter through the app when I moved to Cambridge, then following up directly with the painter for a later job. However, the pricing was the same. I imagine this is because HomeAdvisor does not in fact set prices or facilitate payment, but rather connects the two parties, who then work out payment independent of the platform.

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