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Outsourcing technology startup oDesk has raised a $15 million third round of funding led by DAG Ventures.

Menlo Park, Calif.-based oDesk allows companies to hire technology “providers” like programmers and web designers, and it provides companies with the technology to monitor those remote employees. Chief executive Gary Swart says the need for such a site is growing, as the number of companies looking to outsource some tech work and the number of workers tempted by the flexibility of remote, outsourced employment are both on the rise.

ODesk is best-situated to take advantage of that growing interest, Swart says, because it’s the only company whose service handles the hiring, management and even the payment of outsourced employees. Sites like Rentacoder.com and Elance function more like marketplaces without the management or payment components. [Update: Actually, Elance has been adding some management features.] That works for small, fixed projects, but creates problems for more long-term hiring or when you want to integrate the outsourced employees into your team. Swart offered some pretty compelling evidence, too — comparing the highest-paying jobs on Rentacoder, Elance and oDesk (in oDesk’s case, the numbers are presented through a cool feature called oConomy), it’s pretty clear that the top end of oDesk jobs offer more money.

This round was actually unsolicited, Swart says, because oDesk still had around $3 million of its $8 million second round in the bank. (In fact, oDesk controls costs by using its own technology to manage 41 contractors.) But DAG’s offer, along with the fact that the venture firm didn’t insist on taking a seat on oDesk’s board, was too good to pass up, he says, and it will mean that the startup doesn’t have to look for funding later this year or early next year, freeing it to continue focusing on building its customer base and improving the product.

Existing investors Benchmark Capital, Globespan Capital Partners and Sigma Partners also participated in the new round.

oconomylogo.jpg Online outsourcing marketplace oDesk has launched a new feature called oConomy, where you can browse through global job statistics that are both hopelessly unscientific and endlessly fascinating.

We reported on oDesk in 2006, when the Menlo Park start-up raised a $10 million second round of funding. Basically, the site allows companies to hire technology “providers” such as programmers and web designers, and to monitor them through tools like screen shots, keystroke tracking and photos of the employee at work. Now, oDesk says it’s helped companies outsource more than 1.6 million hours of work completed by more than 47,000 providers in more than 90 countries. And through oConomy, the company is giving the public a chance to browse through data about all of those jobs.

The most interesting new feature is the “global provider map,” which shows every country with workers in the oDesk network. Click on an individual country, and the map displays some basic statistics. (See screenshot below.) I learned, for example, that there are 8,486 oDesk providers in the United States, who work for an average of $23 per hour and who have been given an average satisfaction rating of 4.3 (out of 5) from their employers. India, on the other hand, has 8,018 providers who work for an average of $14 per hour and have been given an average rating of 3.8.

oconomy.jpg

oConomy also offers lists of the highest-rated countries (among those with at least 100 providers, it’s Indonesia), provider companies (ISS Art in Russia) and individual providers (”Vikramsinh J.”, a software professional in India).

You’ve probably figured out that oConomy is probably not, shall we say, the most reliable place to find data for research about outsourcing or international job markets (for that, I’d suggest starting with the federal Bureau of Labor Statistics). I’m also assuming our readers know better than to use oConomy to make sweeping generalizations about which countries have the “best” and “worst” workers. oConomy is probably most useful as a marketing tool for oDesk (”Look how many providers we have!”) and as a way for oDesk users to get some global context. Nonetheless, oConomy offers a glimpse into outsourcing that’s fun and easy to navigate, if admittedly narrow.

oDesk is a start-up that provides a marketplace for companies to hire developers online and then keep near unprecedented control over them remotely.

The Palo Alto company has just raised $8 million more in venture capital.

Benchmark Capital, a Silicon Valley firm known for its backing of auction site eBay, led the round. Bechmark has now invested in numerous marketplaces, including LogoWorks, eBags and Ingenio.

oDesk has some momentum, with revenues growing at 10 to 15 percent a month, says chief executive Gary Swart.

What surprised us, when Swart demonstrated the product for us, is the sheer amount of surveillance and communication tools that oDesk provides to employers. When an employer selects a developer for a project, oDesk gives the employer screen shots of the developer’s computer six times an hour, at random times. It takes camera shots of the developer at work, to verify he is at his desk. It tracks their key strokes, and provides you access to the code they’ve produced — all in an effort to make it even easier to manage workers “than if they are in the same office,” as the company puts it. Before you select a worker, the marketplace dashboard gives you all sorts of metrics about how a developer has performed in the past, tests passed, how much they cost relative to others, and so on.

Check out the tour here.

odeksimg3.jpg

The software is significant because one of the complaints so far about outsourced work is that it can be unreliable. Companies are comfortable only negotiating small projects with workers in Asia, Eastern Europe or Africa. They set a price for the project, and hope that it works out. But for bigger projects, setting a price is difficult, because project can take innumerable turns, and both sides get unhappy. Companies don’t want to pay by the hour, because they don’t know how productive the workers are. oDesk solves that problem. If a developer doesn’t sign on to oDesk’s system and work, they don’t get paid.

This is the second round of funding for oDesk. Benchmark made an aggressive offer of funding, even before oDesk had started looking for funding, Swart said. Benchmark did quick diligence, offered a nice bump in valuation, and did not disrupt oDesk’s team in the process, which Swart said made it easy take the cash. Benchmark’s Kevin Harvey has experience in the marketplace area, having invested in Ingenio, a company which provides software customer support via a marketplace.

The market for outsourcing is growing because online tools such as oDesk give employers easy access to the cost differences of developers between nations and regions. Technology allows more people to stay at home to offer their labor through these sorts of marketplaces, and has bolstered “pay-for-performance” models.

Harvey said the product impressed him after some companies Benchmark has invested in tried out the product and liked it.

There is heavy competition out there. Big players like Infosys and Wipro dominate the market, but oDesk is trying to undercut them — targeting smaller and medium sized companies who haven’t dared to outsource yet. There are players going after smaller companies, such as Elance and Rentacoder.com, too, but they don’t provide the same level of surveillance. (We first mentioned oDesk here, when they raised $6 million last year.)

Sigma Partners and Globespan are also investors, and participated in this round. Until now, Google ads have been the main way the company has acquired users.

The workers in oDesk’s marketplace includes programmers, system administrators, web designers, technical writers and QA engineers — and they reside in more than 50 countries, the company said.

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