Slator contacted Kasriel on the occasion of his joining the Smartcat board. He was introduced to Smartcat CEO, Ivan Smolnikov, by common friend Dana Stalder of Matrix Partners, which invested USD 7m in Smartcat in 2018. According to Kasriel, “The other board members are Ivan and investors in Smartcat”; and he is “a small shareholder” in the company.
Kasriel told Slator, “Ivan and I got along immediately, and equally importantly I felt that I understood the space that he’s operating in — both because I’ve had to deal with traditional localization companies during my time at PayPal and because Smartcat is a combination of SaaS and marketplaces, similar to how Upwork is a combination of both.”
Kasriel joined Upwork in 2012, when it was still oDesk, to lead Product Management and Design. He recalled, “Within a couple of months, the head of the engineering team left and I ended up leading Product, Design, and Engineering.”
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When oDesk merged with Elance in early 2014, Kasriel led the combined PDE organizations for both platforms. He said, “I became the CEO in early 2015 when the CEO of Elance stepped down. We built a great team, took the company public on the Nasdaq in late 2018, and I left the company in the great hands of Hayden Brown at the beginning of 2020.”
Asked if an IPO was in Smartcat’s immediate future, Kasriel replied, “I think the politically correct answer is something like ‘We can’t comment on future plans but we believe that the market opportunity is large enough to sustain a publicly-traded company.’ But beyond that, the real answer is that Ivan is focused on building a great company for the ages, and an IPO is just a milestone in a long journey.”
Investor’s Appetite and the Marketplace Model
Having led a company that has raised close to USD 170m in 12 rounds before going public, Kasriel believes that, despite taking longer than usual these days, VCs still have a lot of capital to deploy.
“From what I can tell, most Limited Partners (the people who invest in the VCs) have mostly kept to their committed capital,” he said, adding that “VCs have been slower than usual to deploy [funds], partly because they’ve been really busy helping their existing portfolio companies, partly because they’ve struggled to close deals in a remote-only environment, and partly because they wanted to see if valuations were going to go down before investing too much.”
“Marketplaces work great when both supply and demand are heavily fragmented; where the traditional market clearing mechanism is inefficient (often, because market-making is done by an inefficient incumbent); and where moving the market to the cloud can create additional economic utility for all participants.”
According to Smartcat’s newest board member, “Smart VCs continue to think that market networks — the companies that combine a network / platform / marketplace with SaaS software — are great companies to invest in, and Smartcat is a perfect example.”
Kasriel said translation/localization lends itself well to a marketplace model because “marketplaces work great when both supply and demand are heavily fragmented; where the traditional market clearing mechanism is inefficient (often, because market-making is done by an inefficient incumbent); and where moving the market to the cloud can create additional economic utility for all participants.”
He emphasized how translation/localization ticks all the boxes: “low market concentration on the supply side (translation agencies), high transaction costs (both sides spend a lot of time and money finding each other), and significant amounts of overhead coming from inefficient processes.”
On what excites him about Smartcat’s product roadmap, Kasriel said that, while he could not go into specifics, they have “a very exciting roadmap that will allow all network participants to operate much more efficiently than they have in the past, [and] linguists to spend more time on what they love, and less on overhead, while allowing language service providers and service buyers to streamline their operations and get higher quality at the same or lower price.”