The TaskUs at hand: New Braunfels’ largest tech company eyes global growth under the radar – San Antonio Express-News

NEW BRAUNFELS — It generated more than $750 million in revenue in 2021. It has more than 45,000 employees across a dozen countries. Its biggest client is Meta, formerly known as Facebook.

In 2018, this technology services provider moved its global headquarters to New Braunfels, considered a major win for economic development leaders in this fast-growing city along the Interstate 35 corridor. A year ago, the company went public on the Nasdaq Stock Market in June 2021 at $23 per share.

Its market capitalization of roughly $2 billion makes it the fourth highest-valued publicly traded company in the San Antonio area behind Valero Energy Corp., Cullen/Frost Bankers Inc. and fellow New Braunfels-based company Rush Enterprises Inc. — and ahead of Rackspace Technology Inc.

A New Braunfels Chamber of Commerce official describes it as the “type of company that we are targeting” to locate in the city. Economic development officials have called it “a great partner” that has “overachieved” since landing in New Braunfels.

But if you ask people working in or walking around downtown New Braunfels, you’d be hard-pressed to find even a handful who’ve heard of TaskUs Inc.

And despite the fact it added nearly as many new staffers globally in the first three months of 2022 alone as are on Rackspace’s the entire payroll, even area tech boosters aren’t quite sure what it does.

TaskUs’ low profile may stem from its nature as a business that provides services behind the scenes for more recognizable brands. Beyond Facebook, they include Doordash, Netflix, Zoom and Uber. And the global focus of its young co-founders — CEO Bryce Maddock, 35, and President Jaspar Weir, 36, who live in Austin and declined to be interviewed — may play a part.

Whatever the reason, it belies the company’s rise in its niche industry and the amount of news it’s made, positive and negative, as reports of torrid growth and record revenue were buttressed by talk of domestic layoffs and a general downward trend in its stock price, which closed May 25 at $21.19 per share.

‘Don’t forget TaskUs’

TaskUs calls itself a “business processing outsourcer.” It provides companies with tech services such as customer support, content security, consulting and artificial intelligence operations.

In filings with the U.S. Securities and Exchange Commission, it describes itself as “a leader in next-generation technology-enabled outsourced services,” with more than 100 clients in social media, e-commerce, gaming, streaming media, food delivery and ride sharing.

Locally, it’s known mainly as a content moderator for Meta, with employees responsible for scrubbing toxic posts and catching messages, images and videos depicting hate speech, violence and pornography. To a lesser-known extent, it also provides digital customer services and artificial intelligence products for e-commerce, financial technology, food delivery, ride sharing, gaming and social media.

Area tech leaders see TaskUs as a thriving unicorn in a city viewed by many as a bedroom community that lacks a vibrant tech scene.

And while Tech Bloc CEO David Heard, like many of his San Antonio colleagues, said he’s not quite sure what TaskUs does — “I think they’re a Facebook moderator doing digital customer experience” — he’s aware it’s on the rise.

“I always heard them briefly mentioned as a tech company that’s growing in the region but choosing to not cluster in San Antonio or Austin,” he said. “It’s like, ‘Don’t forget TaskUs in New Braunfels. They’re growing.’”

Financial performance

While the company’s self-description may be vague, its financial success is clearly documented.

TaskUs’ revenue for the first quarter jumped nearly 57 percent to $239.7 million, up from $152.9 million in first quarter 2021, although its net income of $11.6 million was down from $16.5 million in first quarter 2021. The company said it’s on track to meet its forecast revenue of $980 million to $1 billion for 2022, which would surpass last year’s record revenue of $760 million.

Its financial performance is largely tied to monitoring content for its largest client, Meta, which accounted for 27 percent of its revenue in 2021, according to SEC filings. Its second-largest client, Doordash, the online food ordering company, generated 11 percent of TaskUs’ revenue.

Its results are generally well received on Wall Street, where its share price has fluctuated from a low of $18.22 to as high as $85.49.

“We view TaskUs as a strong franchise, with ongoing growth momentum and attractive client base,” Baird analyst David Koning said in a note after the company’s recent financial report.

The company, however, warned recently of challenges ahead.

On May 9, TaskUs said it’s planning layoffs in the U.S. as it focuses on international growth. It said its clients are seeking to cut costs amid a volatile economic market exacerbated by inflation, the Federal Reserve raising interest rates, and the downfall of cryptocurrency markets.

“Although we are off to a very strong start for the year, the current environment is volatile,” Maddock told reporters and analysts during a conference call.

He said TaskUs had “transitioned hundreds of roles” for its largest client and expected its offshore transition to be completed this month. “In fact, it now awarded us approximately 1,000 additional roles in offshore geographies since the transition began, and we expect to scale most of those roles in the back half of the year,” he said.

Texas based, global view

TaskUs has operations throughout the world that generate most of its revenue. Its workers in the Philippines led the way in 2021, accounting for 53 percent of total revenue, compared with 32 percent from the U.S.

And as TaskUs has increased revenue, it’s grown its global workforce. The company said this month it added 5,700 employees worldwide during the first quarter, bringing its staff count to about 45,800 people across 23 sites in 12 countries, including India, Greece, Ireland, Colombia, Malaysia and Japan.

Rackspace, by comparison, has more than 6,500 employees in 19 countries, according to SEC filings.

TaskUs’ Philippine offices house the majority of its workers with more than 27,000, while its India branch is its fastest-growing, with more than 7,500 workers.

It has more than 4,000 employees in the U.S., the majority of whom are in Texas, including New Braunfels, San Antonio and Harlingen in the Rio Grande Valley.

TaskUs declined to detail its workforce numbers in San Antonio.

“All three service lines are represented in New Braunfels,” Hemant Sehgal — TaskUs senior vice president of operations based in San Antonio, who oversees all North American locations — said in email. “Teammates are working on premium customer support lines and safety work for a large mobile app, as well as risk management and fraud protection for FinTech.”

He said client confidentiality precluded disclosing more specifics.

In April, TaskUs’ global view turned toward Europe as it acquired heloo, a Croatia-based provider of digital customer service to technology companies on that continent.

It said heloo, which marks the company’s first acquisition since going public, has a strong presence in e-commerce and gaming. Maddock called it “another step forward on our growth trajectory and provides us with a solid footprint in Central and Eastern Europe.”

Employees at heloo support 20 languages across seven Eastern European countries, including Bosnia, Serbia and Slovenia, TaskUs said.

Looking ahead, TaskUs has announced grand goals.

“Our future vision includes supporting algorithms for facial recognition, teaching new autonomous vehicles like drones to fly, identifying bullying in real time on live gaming platforms, reading MRIs and X-rays accurately and helping to automatically detect cybersecurity attacks,” according to SEC filings.

With TaskUs’ success has come scrutiny about its footing in content moderation. In January, TaskUs’ shares slumped after New York-based short-seller Spruce Point Capital Management accused the company of failing to disclose enough information about its revenue from the work it performs for Meta.

TaskUs officials declined to comment. But they defended their company in a Jan. 21 statement, saying Spruce Point’s report contained “numerous inaccuracies and mischaracterizations of our business and future prospects.”

Law firms across the nation have since notified investors that a class action lawsuit has been filed against TaskUs in attempts to recover damages for alleged violations of federal securities laws.

Finding a home

For more than two decades, few San Antonio-area tech companies could compare with Rackspace in market capitalization, employment, revenue or reputation.

That company’s creation story by now is an old San Antonio tech tale: Graham Weston and Trinity University students sat at Chester’s Hamburgers and agreed to rent servers to businesses. The “Rackers” — as employees are called — launched what grew to become the city’s largest cloud-computing company.

In 2008, then-Rackspace Chairman Weston led the company’s move to the abandoned Windsor Park Mall in Windcrest, now known among Rackers as the Castle.

That same year, Maddock and Weir — self-described best friends who attended high school together in Santa Monica, Calif. — had been living with their parents when they pooled $20,000 made from throwing alcohol-free parties for teens to start TaskUs as a virtual assistant company in the Philippines.

They eventually rebranded as an outsourcing company and raised enough capital to land deals with the likes of Uber and Coinbase.

In 2016, they moved to Austin to oversee the launch of U.S. operations. And the company spent the next few years searching for a home in Texas.

In 2017, it leased 32,000 square feet in the Fine Silver Building in downtown San Antonio, which it later vacated. The next year, TaskUs opened a 15,000-square-foot office in northwest New Braunfels at the Heritage Plaza Office Building on Independence Drive. It would soon increase the space to 48,000 square feet.

In 2018, TaskUs moved its headquarters to New Braunfels and went public. Maddock and Weir, along with affiliates of Blackstone Group Inc., a New York-based investment management firm, hold stock.

By October, the company again expanded its leased headquarters in New Braunfels to 83,000 square feet, according to Worth & Associates. It added a gaming lounge and a meditation room, among other amenities.

And in 2019, it signed a lease for 77,000 square feet in Rackspace’s headquarters in Windcrest.

Growing in a growing city

New Braunfels is new to the tech industry.

Its population increased 56 percent during the past decade to about 90,400 residents to become the third-fastest growing city in the U.S. City officials said they’re hoping to capitalize on their bustling location to attract more tech companies and workers.

“For New Braunfels, this is just the beginning, because this is a community where people want to live,” said Michele Boggs, vice president of economic development for the New Braunfels Chamber of Commerce. “This is the type of company that we are targeting and has interest in being here.”

Tech Bloc’s Heard noted that the majority of TaskUs’ employees work from home, saying that it shows how tech companies no longer have to fight for real estate in a metro area downtown, and can set up shop in smaller cities instead.

“You can build tech companies from anywhere,” he said.

Other top employers in New Braunfels include Comal Independent School District with 3,132 workers; Schlitterbahn Waterpark with 23,000; Wal-Mart Distribution Center with 1,238; and commercial vehicle retailer Rush Enterprises with 859, according to data from the New Braunfels Economic Development Corp.

TaskUs ranks as the city’s eighth-largest employer with 700 workers, according to EDC data that apparently hasn’t kept up with the company’s growth there.

In January, after TaskUs expanded its office space, the EDC offered the company $300,000 for “a job-creation, performance-based incentive” to help it expand its local presence. TaskUs announced it would hire for hundreds of new positions, bringing its local employment total to 1,200.

While that commitment predated the more recent talk of potential layoffs from its U.S. operations, local economic development officials are confident TaskUS will grow with New Braunfels.

“TaskUs continues to be a great New Braunfels partner, and has accomplished all previous commitments with no issues,” New Braunfels Chamber of Commerce President and CEO Jonathan Packer said in a news release in January. “They are a great employer who continues to hire and grow their investment in New Braunfels.”

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