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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 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.


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