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Venture Capital

Handy’s Lesson for Gig Economy Startups: Profit vs. Growth

When home cleaning startup Homejoy went out of business in mid-2015, it kicked off a culling for a generation of startups trying to get rich from the “gig economy”—connecting delivery people, drivers and cleaners with customers. But a handful of firms survived, including Homejoy’s main rival, Handy Technologies.

Around that time, Handy was burning $3.5 million a month, according to financial data made available exclusively to The Information. Today, it is profitable but growing slower, having expanded its focus from home cleaning into home repair and furniture assembly. And now it confronts a question faced by other startups in a similar situation: how to justify its last valuation of $342 million without the rapid growth it once enjoyed?

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