Freelancer Limited Enters the Enterprise Neighborhood: Who’s the New Kid on the Block? (Part 1)

Lystable Bits and Splits/Adobe Stock

Freelancer.com, a part of publicly-traded Freelancer Limited (FLN.ASX), is one of the two largest online freelancer marketplaces in the world (we’ll leave it to Freelancer and Upwork to duke that out). Spend Matters has covered the company and its online marketplace (Freelancer.com) over the past several years. Most recently, we called attention to its December announcement of “Freelancer Enterprise,” described by CEO Matt Barrie as providing “large organizations with a platform that enables transparency, control, talent management and compliance, together with the ability to scale adoption across the organization.”

In this two-part series, we highlight industry trends, discuss the company and its new enterprise offering, and provide our own Spend Matters commentary. In Part 1, we focus on the overarching trends, Freelancer (the company) and Freelancer Enterprise (the solution). In Part 2, we discuss enterprise demand for Freelancer Enterprise, Freelancer’s experience with procurement and the state of enterprise solutions for sourcing online freelancers, along with suggestions for procurement.

Industry Trends

While online freelancer marketplaces have been around for over 10 years now, they have mainly been used by smaller businesses and, to a lesser degree, by isolated users in larger enterprises. Over the past several years, enterprise managers, ranging from functional heads to executives in HR or procurement, have begun to take note of online freelancer marketplaces. At the same time, however, these managers have felt unsure of how to take advantage of them. This has led online marketplaces to view the untapped enterprise market segment as an enormous growth opportunity.

In just the past several years, a handful of these online marketplaces have begun to offer solutions through which enterprises can enable and manage their internal users’ online marketplace activity. Those online marketplaces — most notably, Upwork — have pursued enterprise strategies that, at least at the beginning, have led with the deliberate development of fit-for-purpose software.

In spite of this, enterprise adoption of online freelancer marketplaces has been slow, limited to a relatively small number of large enterprise that have conducted pilots or initiated services agreements for ongoing use and anticipated expansion of use across their companies.  Recently, however, there have been many indications that enterprise interest and adoption may be accelerating.

It is in within this context that Freelance Enterprise has emerged with what appears to be a slightly different strategy.

Enter Freelancer Limited

Freelancer Ltd was founded in 2009, with the acquisition of two existing online freelancer marketplaces, GetAFreelancer and EUFreelancer. Between 2009 and its 2013 IPO on the Australian Stock Exchange, Freelancer acquired and consolidated four other online marketplaces. Since 2009, Freelancer has bought 18 online marketplaces and other types of businesses, most notably, Escrow.com, in 2015, which provides e-commerce escrow/secure settlement services and is unrelated to the Freelancer.com marketplace.

Today, Freelancer delivers a single online platform that, the company reports, is used by 26 million users from 247 countries, regions and territories, through 53 regional and country specific websites, in 34 languages and 39 currencies. It is worth noting that Freelancer.com is not only a marketplace through which businesses can engage specific online freelancers but also one that serves up other offerings, including “crowdsourced contests” for a range of outcomes from simple logo designs and to complex technical solutions. (NASA has been a frequent user of these crowd contests.)

Freelancer is the only publicly-traded online freelancer marketplace platform, which, separated from Escrow.com, allows for unique visibility into the online marketplace. Freelancer recently published its 2017 fiscal year results report, in which combined results suggested a less-than-stellar year financially. The underlying fundamentals of the freelancer.com marketplace, however, remained fairly sound in terms of growth in number of projects and average project value. In 2017, gross payment value (GPV) of nearly $160 million was essentially flat compared with 2016, but it should be noted that historically GPV grew to $160 million in 2016 from about $35.6 million in 2011. So 2017 was not the best year financially for the online marketplace, but it was far from a disaster.

Freelancer Goes Enterprise

Freelancer Enterprise was announced in December 2017. Based on our conversations with Freelancer management, the solution is at an initial phase of development, and its emergence at this time is basically demand-driven. According to Freelancer, over the past year, the company has begun to receive inquiries from larger enterprises for a way to access the marketplace, but in a managed way that would support consistency of buying, tracking and compliance. Freelancer Enterprise was a response to this demand.

In effect, Freelancer Enterprise was not a planned software solution designed and built for enterprises (supply-driven), but rather — at this stage — more of a re-use and augmentation of capabilities of the core platform in order to satisfy some key enterprise requirements. These include:

  • Compliance: Worker classification, identity verification, etc.
  • Integration: API for connecting with an enterprise’s “intranet or back-end systems”
  • Talent Pools: Organization of preferred freelancers
  • Visibility: Company dashboard with real-time metrics, including usage, spend and custom reports
  • Payment: Consolidated invoicing and payments in 39 currencies
  • Services: Sourcing support, training and other adoption support

According to Freelancer, solution capabilities will evolve in response to concrete demand signals.

There is no license or subscription to access the Freelancer Enterprise solution, and activation time and effort are minimal. Accordingly, the business model is based on transaction and service fees.

In Part 2 of this series, in which we discuss enterprise demand for Freelancer Enterprise, Freelancer’s experience with procurement and the state of enterprise solutions for sourcing online freelancers, along with suggestions for procurement.

Share on Procurious

Discuss this:

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.