Online marketplace Fiverr now worth over $3 billion

The share price of Fiverr, the online freelancer service marketplace, reached $91.39 at the end of Wednesday’s trading session. At that price, the company (which went public in mid-June 2019) was valued at $3.21 billion, for a revenue multiple of about 10X, based on our scratch pad 2020 revenue projection.

The company’s share price, which started 2020 at $23.19, increased by nearly 400% in just under seven months (even as COVID-19 decimated swaths of the economy).

Since the coronavirus disruption began early this year, millions of people have lost their jobs, and many are seeking jobs through platforms like Fiverr. Companies are turning to freelance workers to fill gaps and get projects done instead of hiring full-time employees in such an uncertain business climate.

In a snapshot of the freelance job activity, the online freelance marketplace Freelancer.com stated that in comparison to the same time last year, its marketplace saw “a massive 41% boost in jobs posted in Q2 2020 versus Q2 2019, with the total number rising to 605,000 from 429,000 respectively. In 2020 alone, the jump between Q1 and Q2 was over 25% with the total number of jobs posted rising from 482,000 to 605,000 respectively.” So something appears to be happening out there.

Fiverr’s share price surge could be correlated with a rising demand for online freelance services. Since early April, investor confidence in Fiverr has skyrocketed, based in part on the belief that the COVID-19 environment would accelerate the company’s growth (which is probably happening). Fiverr managed to salvage a more-than-acceptable Q1, even with the demand shock in March (see our article). And there are definitely some positive fundamentals underlying Fiverr’s valuation.

By comparison, Upwork’s share price rose after March, but not nearly to the extent that Fiverr’s has. We’ll know more next week when both Fiverr and Upwork release Q2 2020 financial results, which will provide a better picture.

To get a deeper look into Fiverr and its business model, see our June 2019 PRO series, Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know, (Part 1) and (Part 2).