Billion Dollar Unicorns: Upwork Finally Goes Public

As per a recent Morgan Stanley report, freelance workers will account for nearly half of the US workforce within ten years, compared with the current 35% share. The shift in the workforce is attributed to changing demographics, increased digitization, and the adoption of cloud-based services. Earlier this week, Billion Dollar Unicorn Upwork (Nasdaq: UPWK) went public. It is still early days, but the stock appears to have done well so far.

Upwork’s Financials

Mountain View-based Upwork was founded after the merger of two freelance platforms Elance and oDesk. Elance was set up by Srinivas Anumolu, Sanjay Noronha, and Beerud Sheth as a marketplace for services. oDesk came about much later and was formed when Odysseas Tsatalos and Stratis Karamanlakis realized that they wanted to work with each other even though one of them was in the Silicon Valley, and the other in Athens. The two friends wanted to build a trustworthy platform that allowed workers to work from wherever they liked on projects that interested them. In 2013, the two freelance platforms merged to become Elance-oDesk.

Today, Upwork operates one of the largest online global marketplace that helps businesses find and work with freelancers. Its platform provides clients with fast, secure, and efficient access to talent across 5,000 skills, reducing reliance on staffing firms, recruiters, and third party agencies.

Upwork earns revenues by charging a commission on work awarded through its site from the employers and a sliding fee based on commission from the freelance workers. It has seen rapid growth over the past few years. It has helped deliver over $1.37 billion in services last year. Revenues for the company grew 23% last year to $202.6 million. For the six months ended June this year, revenues grew 28% to $121.9 million. Marketplace segment is its biggest revenue contributor with revenues growing 29% to $178.1 million for the year ended December 2017. Managed services revenues fell 6% over the year to $24.5 million.

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