Berlin-based multicategory online freelancer marketplace twago recently acquired Madrid-based platform Adtriboo. The terms of the deal were not disclosed. This transaction represents a significant step for twago, which received a Series A investment from the Innovation Fund of global staffing player Randstad NV in 2014. (Note: Spend Matters will also be covering twago this week as the WIP of the Week.)
Twago, launched in 2009, has served mainly European businesses (with localized sites in English, German, Spanish, Italian, French, Dutch, Swedish, Danish, Norwegian, Finnish and Dutch) and reports having about 500,000 registered freelancers in over 200 countries. Adtriboo, launched in 2011, is a Spanish-language marketplace, serving Spain and several Spanish-speaking Latin American countries.
Spain: A Coveted Market
This acquisition appears to represent a big shot in the arm for twago, which will gain 140,000 Spanish-speaking freelancers in Spain as well as in Latin America. The freelance work market in Spain is reported to be a growing, and therefore attractive country, which twago has already set its sights on.
Co-founder and CEO Thomas Jajeh has stated that the Spain freelancer represents more than 16% of the workforce, well above the average ratio for all European countries. Sixty percent of Spanish freelancers are between 25 and 49 years old, and the number of freelancers under the age of 25 has nearly doubled in the last two years, as the economy and labor market in Spain continues to undergo structural changes (businesses keep employment low and new graduates turn to freelancing). Recently, twago has reported that Madrid has surpassed Berlin as the top freelancer city in Europe. Prior to the Adtriboo acquisition, the volume of Spanish projects on the twago platforms was exceeded only by German projects, and satisfaction ratings for projects conducted by Spanish-speakers has reached an average of 4.5 out of 5.0 points.
Europe: A fragmented Market
The online freelancer marketplace space in Europe includes probably more than 20 relatively small online platform businesses most often focused to specific language markets — for example, Codeur in France, Freelance.de in Germany, Scriptlance (acquired by Freelancer Ltd) in Poland and others. Europe is also served by the global multicategory marketplace platforms like Freelancer Ltd and Upwork. Twago may fall somewhere in the middle of the fray, with the unique model of serving different country markets with localized websites.
The European markets may pose challenges — including platform scaling — due to fragmentation, regulation and cultural factors. Added to the challenges may be relatively strong, entrenched competitors, such as Nubelo in Spain.
CEO Jajeh, told us, however, that twago is the only marketplace platform with a pan-European orientation serving country markets in accordance with their local languages and cultures. While language is apparently the No. 1 priority for businesses seeking online freelancers, twago brings both language-specific marketplaces and the benefits of broader platform, including faster scaling.
A Combination of Consolidation Play, Market Expansion and Pan-European Strategy
Jajeh told us that the databases of freelancers and businesses have already been converted to the twago platform, and the Adtriboo platform is no more. When asked about whether the presence of Adtriboo in Latin American markets would mean an expansion of the focus on Europe, he told us that it would not and that Latin-America was really being looked at as an expanded, offshore talent population that cost-conscious Spanish businesses could leverage.
Overall, Jajeh noted, “we have taken an important step in our growth strategy with the acquisition of Adtriboo. In addition to growing our participation in the important freelancer market in Spain, it also strengthens our competitive and growth strategy as the leading — actually only — pan-European online freelancer marketplace.”
Spend Matters Take
We at Spend Matters are not yet sure if the twago acquisition of Adtriboo may signal any acceleration in the consolidation of online freelancer marketplaces (e.g., the acquisitive Freelancer Ltd, the merger of Elance-oDesk into Upwork). But we do believe that twago and its acquisition of Adtriboo provide exceptional insight into the extreme heterogeneity of work intermediation platforms and the necessarily diverse strategies they pursue. This will be further discussed in our forthcoming WIP of the Week research brief that will be accessible to our PRO subscribers.