The Rise and Fall of HomeAdvisor: From “Pre-Screened Pros” to FTC Fines

For years, contractors have warned each other about HomeAdvisor — and now, the full story is finally coming to light.

In this video, Dmitry  breaks down the rise and fall of one of the most controversial names in home improvement tech. What started in 1998 as a startup called ServiceMagic — built to connect homeowners with “pre-screened” contractors — evolved into HomeAdvisor, then Angi, and finally into one of the most distrusted platforms in the trades.

From ServiceMagic to HomeAdvisor

Founded by Rodney Rice and Michael Beaudoin, ServiceMagic was supposed to make hiring contractors safer and easier. But by the mid-2000s, homeowners and pros were reporting serious problems: fake leads, unqualified “verified” contractors, and accounts that couldn’t be canceled.

Lawsuits, Rebrands, and the Angi Merger

After years of complaints, the company rebranded to HomeAdvisor in 2012 — a move many contractors say was meant to escape its bad reputation.
Just five years later, HomeAdvisor’s parent company IAC bought Angie’s List for $500 million and merged the two into Angi. But behind the polished rebrand, lawsuits piled up — from San Francisco’s $7 million false advertising settlement to a $7.2 million FTC fine for misleading contractors about the quality of their leads.

Class Actions & Whistleblowers

Contractors across the country joined class actions accusing HomeAdvisor of fake and duplicate leads, deceptive sales tactics, and unauthorized charges. Even former employees came forward, confirming what pros had been saying for years.

The Fallout

Despite settlements and fines, Angi and HomeAdvisor still brought in $300 million in 2023 revenue, but their stock price and reputation have plummeted.
For many roofers and remodelers, this saga is a reminder of how vulnerable small contractors are to lead-gen platforms that value profit over honesty.