Sydney, Australia-based work intermediation platform (WIP) Freelancer Ltd racked up positive points after it released its first quarter results last week. Freelancer, which went public in late 2013 on the ASX, is still the only WIP business today that is publicly traded.
Freelancer was formed in 2009 and grew its core online freelancer and crowd contest marketplace business through a series of WIP acquisitions and organic growth. Today, Freelancer asserts that it is the largest such business, measured in terms of jobs posted and number of users. Over the past few years, the company has also extended its offerings with “Freelance Local” (a local worker task business, similar to TaskRabbit) and has diversified with a number of complementary acquisitions, most recently a payment-escrow business, Escrow.com). For more background details, see prior Spend Matters coverage: FY 2015 Results Release and Freelancer: The WIP of the Week.
For Q1-16, the company reported these results for the business as a whole:
- Record cash receipts of $12.8 million, up 60% over Q1-15 (includes cash receipts of Escrow.com, which was acquired in November)
- Positive operating cash flow of $1.95 million (also includes Escrow).
- Cash and equivalents of $33.1 million (end of quarter). The company also reports that U.S.-based Escrow .com “also holds $28.6 million in cash, in trust, off balance sheet.”
As noted above, the company has achieved a market cap of about A$750 million, with the stock trading at about A$1.7 per share. Net revenue in 2015 was A$39 million — effectively a revenue multiple of 20X. Gross payment value in 2015 was $229 million. EBIDTA in 2015 was a loss of about A$ 3 million, after investment in expansion increased following the IPO.
The core online marketplace business also continued to expand in Q1-16. Relative to Q1-15, jobs posted on the marketplace increased in Q-16 over 60%. Australia-based Foster Stockbroking estimated that marketplace-only cash receipts in Q1-16 grew by about 20% over the corresponding 2015 quarter. As can be seen to the below, Freelancer’s online marketplace net revenue growth path from 2010 through 2015 has been consistently up — apparently a continuing trend in 2016. Prior to 2014, the marketplace business was returning positive earnings (per the IPO Prospectus), and the marketplace fundamentals appear to strong for 2014 and 2015.
Freelancer Ltd continues to demonstrate its strong performance entering 2016, and the requirements of being a public company provide a unique visibility into a fast scaling work intermediation platform business. What can be seen suggests that, contrary to some industry opinion, work intermediation platforms cannot be going concerns. As for Freelancer and its completely unique strategy, so far so good. What this means for contingent workforce procurement managers is that one day, before too long, work intermediation platform businesses might very well earn their own place at the suppliers’ table.