Blue-collar task matching platform

Blue-collar task matching platform

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Blue-collar task matching platform

Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Infrastructure
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
> 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
South Africa ranks 14th out of 16 G20 countries on Accenture’s Platform Readiness Index.
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 500,000 - USD 1 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Industry, Innovation and Infrastructure (SDG 9)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1)

Business Model Description

Develop and operate task-matching platforms that create a marketplace for low skilled labour in a range of ‘blue collar’ activities, such as domestic services, gardening, painting, maintenance, and electrical and plumbing work.

Expected Impact

Create new income and work opportunities and scale up employment for temporary workers.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

Disclaimer

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The descriptions on this page are provided for informational purposes only. Only companies and enterprises that appear under the case study tab have been validated and vetted through UNDP programmes such as the Growth Stage Impact Ventures (GSIV), Business Call to Action (BCtA), or through other UN agencies. Even then, under no circumstances should their appearance on this website be construed as an endorsement for any relationship or investment. UNDP assumes no liability for investment losses directly or indirectly resulting from recommendations made, implied, or inferred by its research. Likewise, UNDP assumes no claim to investment gains directly or indirectly resulting from trading profits, investment management, or advisory fees obtained by following investment recommendations made, implied, or inferred by its research.

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Country & Regions

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Region
  • South Africa: Countrywide
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Infrastructure

Development need
South South Africa faces significant challenges in achieving SDG 9 - Industry, Innovation and Infrastructure, with a score of 45.0. Scores for other goals include 48.7 for SDG 3 - Good Health and Wellbeing, 67.0 for SDG 6 - Clean Water and Sanitation, 79.0 for SDG 7 - Affordable and Clean Energy, and 77.9 for SDG 11 - Sustainable Cities and Communities.(1)

Policy priority
The National Planning Committee identified 9 primary challenges, 4 of which have infrastructure development needs and implications: the public health system cannot meet demand or sustain quality, the economy is unsustainably resource intensive, spatial divides hobble inclusive development, and infrastructure is poorly located, inadequate and undermaintained.(2)

Gender inequalities and marginalization issues
Poor infrastructure can exacerbate the gender gap. In low income countries, women collect over 70% of water and fuelwood. Women spend 200 million hours on water collection every day. Unsafe and low security transport also disadvantage women who are more affected by violence, which affects their wellbeing and workforce participation.(19)

Investment opportunities introduction
President Ramaphosa has an investment drive to mobilise $100 billion for priority sectors, including the energy, water, transport and logistics, and data and ICT sectors.(4) The Sustainable Infrastructure Development Symposium South Africa organised by the Investment and Infrastructure Office within the Presidency seeks to create a $20.5 billion infrastructure fund.(5)

Key bottlenecks introduction
High fixed costs, high levels of debt and low cash reserves may cause a liquidity crisis.(6) Construction was restricted during lockdown and sharp contractions of fixed investment can be expected as firms reconsider or postpone implementation.(7) Projects exposed to foreign currency risk foreign exchange fluctuations and further uncertainty if not previously hedged.(6)

Sub Sector

Infrastructure

Development need
South Africa is facing a major unemployment problem, especially among the country's youth.(7),(8),(9) The Quarterly Labour Force Survey for 2020 indicates the number of unemployed persons has increased by 344,000 to 7.1 million. In the first quarter of 2020, 20.4 million young people (aged 15–34 years) were unemployed (63.3% of the total number of unemployed persons).(12)

Policy priority
There is a desperate need for job creation, especially for low skilled jobs. The National Development Plan (NDP) aims to reduce unemployment to 6% by 2030 (14), however unemployment remains one of the country's biggest problems and one of the hardest to fix.

Gender inequalities and marginalization issues
Better integration of female talent into infrastructure planning, management and policy design should be part of the solution for transformative action.(19)

Investment opportunities introduction
South Africa is already embracing digital and other technologies to create positive change in a number of areas.(18)

Industry

Engineering and Construction Services

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Blue-collar task matching platform

Business Model

Develop and operate task-matching platforms that create a marketplace for low skilled labour in a range of ‘blue collar’ activities, such as domestic services, gardening, painting, maintenance, and electrical and plumbing work.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

South Africa ranks 14th out of 16 G20 countries on Accenture’s Platform Readiness Index.

The market for digital platforms in South Africa has yet to mature.(8)

Platform businesses across industries have room for growth. These platforms have received private sector finance however there is great potential for further investment in the rapidly growing market of task-matching platforms.(11)

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

> 25%

A Cape Town-based venture capital fund that has invested in several South African task-matching platforms targeted a minimum internal rate of return (IRR) of 40%.(16) The fund aims to return 35% or three times investors’ initial investment within the typical 10 years of a fund.

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

Investors look to exit after 4 to 7 years.(9)

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 500,000 - USD 1 million

Market Risks & Scale Obstacles

Capital - CapEx Intensive

Digital issues and connectivity issues, training and skills development

Market - Highly Regulated

Government policy and regulation (10)

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

A large portion of South Africa's workforce seek and earn income in blue collar activities such as domestic services, gardening, painting, maintenance, and electrical and plumbing work. Much of this work has relatively low barriers to entry, and is informal and part time. As a result, it can be uncertain, and several constraints contribute to inefficient matching of available supply to demand.(8)

There are high costs of work and worker searching, a reliance on referrals, and often both customers and providers are unable to verify the credibility of work-seekers and employers.(8)

Gender & Marginalisation

Poor infrastructure affects women's wellbeing and workforce participation.(19)

Expected Development Outcome

Blue collar task-matching platforms have the potential to: create employment opportunities for low skilled labour (8),(9); reduce information asymmetries in low skill labour markets; and accelerate paths to employment and remove barriers to entry.

Upskill supply-side participants; improve conditions for overall economic and job growth in the country

Gender & Marginalisation

Contribute to the integration of female talent by creating new employment opportunities

Primary SDGs addressed

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.5.2 Unemployment rate, by sex, age and persons with disabilities

Current Value

Unemployment rate by sex - males: 25.5% (2017), females: 29.4% (2017). Youth (15–34 years) unemployment rate: 38.7% (2017). Youth unemployment rate (female to male ratio): 1.16 in 2019. Total unemployment rate (female to male ratio): 1.15 in 2019.(20)

Target Value

N/A

Industry, Innovation and Infrastructure (SDG 9)
9 - Industry, Innovation and Infrastructure

9.b.1 Proportion of medium and high-tech industry value added in total value added

Current Value

24.43% (2015) (22)

Secondary SDGs addressed

1 - No Poverty

Directly impacted stakeholders

People

Blue collar workers (job creation for low skill service providers covering domestic services, gardening, painting, maintenance, and electrical, plumbing work etc.). Customers (easier to find and connect with blue collar workers).

Outcome Risks

Exploitation of workers who use platforms to provide services. Low pay and poor working conditions.

Impact Risks

Stakeholder participation risk if successful platforms gain market power which could be used to exclude up-and-coming competitors or work to the disadvantage of either suppliers or customers (8)

Impact Classification

B—Benefit Stakeholders

What

The outcome is likely to be positive and important, by removing the barriers to entry for low skilled workers to find opportunities

Risk

Medium risk

Impact Thesis

Create new income and work opportunities and scale up employment for temporary workers.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

The mission of the Department of Communication focuses on developing an information society in South Africa , formulating a policy environment of growth for all its citizens in a global digital economy.(18)

Financial Environment

Financial incentives: Significant private investment through venture capital firms.(15)

Fiscal incentives: There is not much government funding for platforms for South Africa's digital economy.

Regulatory Environment

Labour and competition law: Labour rights are limited for workers classified as ‘employees’. Digital platforms classify their workers as 'independent contractors'.(17)

Marketplace Participants

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Private Sector

Kandua, Domestly, SweepSouth, Clockwork, 234work, Freelancer.com, Fiverr, getTOD, Handymandirect, Guru Hubstaff Talent, Kandua, Kuhustle, Nomad Now, NoSweat Work, PeoplePerHour, PrimU, Snupit, TaskApp, Truelancer.com, twago, Workana and Weworx, Investec, Vinny Lingham

Government

Centre for IT and National Development

Non-Profit

Wesgro, Silicon Cape

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
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urban

South Africa: Countrywide

A blue collar task-matching platform would be beneficial throughout South Africa and specifically in large metropolitan areas with many unemployed blue collar workers, such as Pretoria, Johannesburg, Cape Town and Durban.

References

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