Straker defends gig economy as IPO nears
Sharemarket investors will have their first chance to buy into a New Zealand ‘‘gig economy’’ company this month.
Auckland-based Straker Translations, which farms out translation work around the world through an online platform, will raise $20 million through a float on the Australian stock exchange that will value the firm at $86m.
The initial public offering (IPO) comes amid fierce debate about the tradeoffs involved in new ways of working.
Perpetual Guardian managing director Andrew Barnes this week criticised the gig economy, saying it bought flexibility for companies but came at ‘‘a cost to society and the employees down the track’’.
Straker chief executive Grant Straker is a former soldier born to a Ma¯ori mother who has advocated for Ma¯ ori involvement in the technology industry.
The company won the Callaghan Innovation Best HiTech Maori Innovation award at this year’s Hi-Tech awards and has a global pool of 13,000 freelance translators on its books.
It takes translation work from around the world and farms it out to translators at an average pay rate of between US$20 (NZ$30) and US$30 an hour, using an algorithm that takes into account their skills and ratings.
The company forecast an operating loss of close to $200,000 on revenues of about $25m this year.
Straker is one of a small group of Kiwi tech companies that have found an international niche helping run the gig economy.
Others include 90 Seconds, which runs a global platform to outsource video production work, and Wellington pioneer StarNow, which has more than 100,000 models, dancers, actors, extra, musicians, photographers and makeup artists on its books.
A report by Oxford University this year found that contractors in the gig economy sometimes felt pressured by algorithms to never turn down jobs and were prone to stress and overwork.
Grant Straker acknowledged that working in the gig economy meant stepping outside a safety net. ‘‘But that is the tradeoff for the flexibility you get.’’
One Kiwi translator who worked occasionally for Straker said a challenge was that some activities would not be logged and paid for – for example, if translators needed to go offline to research a language problem.
‘‘Because they are working for global companies . . . by the time you wake up you may find all the jobs have been assigned.’’
But he said the company had helped him get ‘‘a foot in the door’’ as a translator. There were positive aspects to Straker’s technology such as an efficient invoicing system, he said.
There were increasingly few employment opportunities for translators, and the trend in the industry as a whole was to squeeze costs rather than aim for high quality, he said.
Grant Straker responded that the company sometimes got negative feedback from translators who did not get jobs, but the comments were not reflective.
‘‘It is fair – the people who are good will get more work; it is that simple. This isn’t like the gig economy where you are using a low-cost resource in a third-world country.’’
Straker is expected to list on the ASX on October 22.
The company said the $20m of new funds from the fully underwritten offer would provide financial flexibility to fund the future growth of the business.
Early-stage investors would sell 1.9 millon of shares into the offer, meaning about $23m of stock would be available in total.