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Get me information about Upwork
Hello! Thank you for your request to provide you with information about Upwork. I understand that you are looking for insights into Upwork's revenues, exit strategy, traction, growth, profit, and future plans. The short version is that Upwork is the largest freelancer platform in the world, but it is struggling financially despite record growth between 2012 and 2014. A deep dive of my findings is below.
Methodology
To begin my research, I familiarized myself with Upwork by scouring its website and recent press releases. Once I understood the business Upwork is in, I then began researching various aspects of the company, including its history, social media activity, financial information, growth rates, profitability, IPO plans, and any other information that would be helpful to you. Using the information I learned during my research, I put together a comprehensive company analysis for Upwork.
Limitations
Despite extensive research, I was unable to find any confirmed information on Upwork's exit strategy or profitability. There are indications that the company is not very profitable, but at the same time, there are rumors that the company is intending to go public as well. I provided information on this speculation, but could not locate any data that verifies it. Moreover, there is not much information available on market traction for Upwork. It is clearly still the place for freelancers to go, as is evidenced by the $1 billion that freelancers are earning through Upwork every year, and it is still larger than all other freelance sites combined. In addition, while the latest round of funding was in late 2014, it appears that investors are still interested in the company and believe it has the market traction to eventually go public. Unfortunately, other than this observational analysis, there is little hard evidence to support Upwork's current market traction.
Results
OVERVIEW
Upwork is "the world’s leading freelancing website," on which millions of jobs are posted annually and through which "freelancers are earning over $1 billion per year." Freelancers can find contracting work in a variety of categories, including web and mobile app development, social media marketing, SEO, graphic design, content writing, and more. As of 2014, there were 9.7 million registered users with more than "5000 skills in over 90 categories." That platform is also "used by 5 million companies in 180 countries, including 20 percent of the Fortune 500."
HISTORY
Upwork got its start in 1999 under the original name of Elance. In May 2014, Elance and another freelance company, oDesk merged to create Elance-oDesk. At the time, Elance had 78,000 freelance jobs listed on its platform and oDesk had 48,000. Together, they created the largest freelance platform in the world. Essentially, this merger spelled the end of oDesk, as its CEO, Gary Swart, stepped aside to allow Elance's CEO, Fabio Rosati to run the merged company. Rosati had been Elance's CEO since its inception. Nearly a year later, in April 2015, a new CEO, Stephane Kasriel took the place of Rosati, who stayed on as a member of the board of directors. In May 2015 Elance-oDesk changed its name to Upwork in a "complete relaunch of the company." All oDesk jobs were immediately moved to the new Upwork site, while Elance continued to operate separately for another year before it too was absorbed into Upwork.
The move to Upwork was viewed by industry experts as a push for growth as "Upwork face[d] competition from a growing number of other freelance platforms, ranging from general marketplaces such as Freelancer.com and People Per Hour to industry-specific ones, such as 99 Designs. Upwork [was] looking to gain an edge by enabling clients to hire freelancers more quickly." At the same time as the name change, the company introduced the Upwork Message Center, which was a new chat tool that enabled companies to communicate with freelancers and groups of freelancers in real time. In addition, Upwork intended to level the playing field for "freelancers in countries where wages are on the high end of the scale, such as the U. S.," who are at a distinct disadvantage when competing with freelancers in countries where the cost of living is much lower. The result was that highly-compensated freelancers were not using Elance-oDesk to find work. The new Upwork platform intended to "attract a greater share of freelancers who command top rates [so that] it would likely gain a major edge, because the platforms generally take a cut in each project."
CURRENT EXECUTIVES
BUSINESS MODEL
Upwork's business model is basically to match job openings with qualified workers. However, the difference between Upwork and other types of job boards is that the workers are freelance contractors that do not become W2 employees of the companies. They are paid by the job and do not have taxes withheld from their earnings. The San Diego Tribune described the business model this way:
"Companies such as Upwork, Guru, Fiverr, OneSpace, and Freelancer.com are combination electronic matchmakers, project management platforms and payroll processors. Freelancers can use the sites to find or bid on projects that match their skills and experience...Online platforms like these make money by charging corporate users a monthly subscription or project-based fee for pairing them up with freelancers, collecting tax forms, getting contracts signed, making payments (often via PayPal) and handling other administrative duties."
FINANCIALS
Since Upwork is still a private company that has not released any financial information, I am only able to provide an estimated annual revenue. Owler indicates that in 2016, the company's revenues were $68.8 million. Hoovers, on the other hand, set the company's revenues at about $34.26 million. Yet a third source, a TechCrunch article, estimates Upwork's revenue to be about $100 million based on taking 10% of its $1 billion worth of jobs. So, an average of the three estimates would be $67.69 million, which puts it close to Owler's estimate.
Upwork (mostly as Elance) has received a total of $168.8 million in funding in 10 rounds, from 17 different investors. The funding rounds are as follows:
February 2000 — $12 million (Series A)
September 2000 — $50 million (Series B)
April 2003 — $$6.8 million (Venture)
August 2004 — $10 million (Series E)
September 2006 — $8 million (Series B)
April 2007 — $6 million (Series A)
June 2008 — $15 million (Series C)
January 2012 — $16 million (Venture)
March 2012 — $15 million (Series D)
November 2014 — $30 million (Venture)
GROWTH
The only hard data I was able to find regarding Upwork's growth is from between 2012 and 2014, during which Upwork has grown 77%. While this might seem like a lot, two of Upwork's competitors, Freelancer and 99Designs have grown much more. During the same period, Freelancer grew by 92% and 99Designs grew by 354%. However, Upwork is positioning iteself to continue to be the industry leader as the total outsourcing market grows to an expected $5 billion by 2018 and $10 billion by 2021. In August 2017, Upwork opened a new office in Chicago with 23 employees. It expects to add 50 new employees by year's end and 100 new employees by 2018. In addition, the company said it "plans to continue that growth into 2019."
CURRENT FINANCIAL STATUS AND OUTLOOK
Despite the fact that Upwork continues to focus on growth, the financial outlook for the company does not seem too promising. In the first quarter of 2016, Upwork's equity value was slashed from $15.8 million in 2014 to $7.3 million, representing a 10% decrease in value per month. In addition, when Elance and oDesk merged in 2014, there were a total of 126,000 jobs posted on the combined platform. Just two years later, in May 2016, there were only 85,579.
In a move that appears to some insiders to be a step toward going public and to others as a "last-ditch effort to stop the boat from sinking," CEO Stephane Kasriel changed the fee structure for freelancers in May 2016. Instead of charging freelancers a flat 10% of their earnings, Upwork cut the percentage to 5% for freelancers earning more than $10,000 per client, increased the percentage to 20% for freelancers earning less than $500 per client, and kept the fee at 10% for freelancers earning between $500.01 to $9,999.99 per client. Clients who hire freelancers are now charged a 2.5% transaction fee, something Upwork had been absorbing before the changes were implemented. Kasriel said the fee structure change was "a move to encourage long-term relationships between freelancers and clients who find them on the site," however, of the freelancers who have weighed in on the issues, 84% were "very unhappy with this new pricing policy," 79% of freelancers were "looking to leave this platform in 6 months and out of which 51% are planning to leave it in 2 months," and 92% were planning to "take the client-freelance relationship outside of Upwork." Moreover, freelancers tend to generally be unhappy with the company, saying, "Every policy change...announced by Upwork has met vehement opposition but got implemented anyway." The CEO only has a 61% approval rate on Owler, and many freelancers do not believe Upwork puts its workers and community before its investors.
SOCIAL MEDIA
Upwork is very active on social media and holds accounts on Facebook, Twitter, Instagram, LinkedIn, Google+, and even Pinterest. The company posts on average of once per day across all platforms, but is most active on Twitter and Facebook, often posting and tweeting multiple times each day. Their follower numbers are:
The Upwork website received 30.69 million visitors over the past 30 days. On average, people go to 7.61 pages per visit and stay on each page an average of nine minutes, 46 seconds.
CURRENT NEWS AND FUTURE PLANS
In August 2017, Upwork announced the formation of its new Talent Services Division, which is being billed as the"World’s Largest On-Demand Talent Agency. This division is geared toward helping larger companies find "the specific freelance talent they need, when they need it." The addition is an enhancement to Upwork Enterprise, a platform solution for larger companies, which was launched in 2015. Currently, Upwork states that 20% of fortune 500 companies use Upwork Enterprise to hire freelancers quickly.
In February 2016, Upwork launched Upwork Pro, "a premium sourcing solution for mid-sized businesses" that helps them "identify top talent quicker by providing access to handpicked, prescreened freelancers for long-term project needs including developers, graphic designers, content writers and customer support professionals." Since freelancers are typically associated with small businesses (over 80% of Upwork's revenue comes from small companies), Upwork is attempting to grow its business by appealing to medium- and large-size businesses.
While there has been no official statement regarding an exit strategy for Upwork, many insiders consider the additions of Upwork Enterprise and Upwork Pro as indications the company is attempting to boost profits ahead of an IPO. However, as stated earlier, some industry experts believe these efforts could simply be a final attempt to stave off a company collapse.
Conclusion
To wrap it up, Upwork is the world's largest freelancer platform, with approximately $68 million in annual revenue. Despite its attempts to bring in larger companies and its long history of funding, the company appears to be struggling in a market where young competitors are growing at a faster rate. There is little information on an exit strategy, although some industry experts believe an IPO could be on the horizon. Upwork is currently engaging in business model changes that could either signal that the company is going public or going under.
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