Author Archives: Andrew Karpie



Fiverr IPO launches at $21, and share price nearly doubles

procurement

Fiverr (NYSE: FVRR), the online marketplace for digital creative services, priced its 5.3 million IPO shares Wednesday night at $21 per, raising about $111 million in new funding. On Thursday morning, shares began trading at $26, but when the market closed in the afternoon, Fiverr’s share price had risen to $39.96 (nearly doubling). Based on the closing price per share and an estimated 31 million shares outstanding, Fiverr’s market cap would be about $1.2 billion, or 16 times revenue.

We will provide further analytic post-IPO coverage soon. In the meantime, check out our recent PRO series: Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know — Part 1 and Part 2.

Fiverr, Online Services Marketplace, Is Going Public: What You Need to Know (Part 2)

Coworks

This two-part Spend Matters PRO series examines the online services platform provider Fiverr, which recently announced that it is going public (presumptively this month). The company — which has brought a fresh, distinct approach to the business market for freelancer-driven, platform-based work/services — will become the next business in the category to IPO after Freelancer.com (ASX: FLN) in 2013 and Upwork (NASDAQ: UPWK) in 2018.

Becoming a public company can be accompanied by opportunities for business validation, market awareness, access to capital, etc., but it brings new responsibilities, transparency and challenges (especially in a market that — despite getting kicked off in the mid-2000s — is still immature and evolving). Do these IPOs mark the start of a new stage of market development when businesses of all sizes may begin to accommodate and scale their new workforce models? If so, what do procurement practitioners and senior business executives know about Fiverr and the market that it and other work/services platforms operate in?

In Part 1, we examined Fiverr as an online work/services platform business (background, go-to-market strategy, solution offering and financial picture).

In Part 2, we will look at Fiverr in a broader industry context and provide a high-level comparison to Freelancer.com and Upwork. We also offer insights for procurement practitioners and executive leadership in larger organizations who are trying to get a handle on the potential supply channel of online/remote, freelancer-based work/services platforms.

Fiverr, the Online Services Marketplace, Is Going Public: What You Need to Know (Part 1)

low commodity prices

Spend Matters recently reported that Fiverr, the Tel Aviv-based online marketplace for digital creative services launched in 2010, had filed its Form F-1 paperwork to go public with the U.S. Securities and Exchange Commission. Fiverr is the third online work/services platform to IPO, preceded by Upwork in October 2018 (NASDAQ: UPWK) and Freelancer.com in October 2013 (ASX: FLN). Among other things, the Fiverr IPO represents a new opportunity for analysts to get significant insight into another online freelancer marketplace’s financials and other business characteristics, including business strategy, business model and go-to-market approach.

Years ago, when Fiverr entered the market, some may have dismissed it as a low-end “5-dollar store” of online freelancers. But there was more than met the eye. In fact, Fiverr had begun executing its differentiated strategy of creating a unique marketplace based on its service-as-a-product model. According to Fiverr, it had “set out to design a digital marketplace that is built with a comprehensive SKU-like services catalog and an efficient search, find and order process that mirrors a typical e-commerce transaction.”

In this two-part PRO series, we will further discuss Fiverr and its SaaP model, including why it may align to procurement practitioner mindsets and e-procurement solution models. In Part 1, relying partly on Fiverr’s F-1, we will focus on Fiverr as a company and as a unique online freelancer marketplace platform. In Part 2, we will consider the broader context of evolving population of other online freelancer marketplaces, with special emphasis on the public companies, Upwork and Freelancer.

Beeline vs. Coupa Contingent Workforce: Temp Staffing/VMS Head-to-Head Comparison

The market for vendor management system (VMS) solutions has undergone two major structural shifts over the last few years.

At the end of 2016, Beeline shrank the total pool of available vendors when it merged with IQNavigator, creating the largest independent, pure play contingent workforce and services procurement technology provider by a significant margin. The two VMS solutions — now a single entity under the Beeline brand — are being converged and replatformed into a unified offering (BeelineOne) while developing innovative approaches to external workforce sourcing and management requirements. Facilitating this effort is the private equity firm New Mountain Capital, which acquired Beeline in July 2018 and has been working to strengthen Beeline’s competitive positioning, especially against the VMS market’s largest offering, SAP Fieldglass.

But in late 2018, a new competitive threat emerged, one that could turn the current “Big 2” VMS provider dynamic back into a “Big 3.” This of course was Coupa’s acquisition of DCR Workforce, which catapulted the source-to-pay suite provider (and arch competitor with SAP Ariba) into the top tiers of contingent workforce and services procurement technology capability. Coupa has branded the current and eventually integrated and replatformed capabilities as Coupa Contingent Workforce (CCW). While Coupa previously did provide baseline support for contracted-SOW services through its Services Maestro module, the acquisition allows Coupa to expand its offering and provide the same range and types of capabilities that would generally be found in leading VMS solutions. Even as the full integration of the acquired DCR capabilities will take time, CCW already poses a competitive threat to the likes of SAP Fieldglass (recently consolidated with SAP Ariba and SAP Concur in the newly formed SAP Intelligent Spend Group) — and, of course, Beeline.

The rapid evolution of the “new” Beeline and Coupa’s surprise leap into the upper tiers of the VMS market raises the question: How do the two vendors stack up in a head-to-head bout? After all, competitive matchups between the two are already becoming a more frequent event, and both help set the average functional benchmark score in Spend Matters’ Q4 2018 Temp Staffing SolutionMap. (The Q4 results are labeled Coupa but look specifically at the DCR solution pre-acquisition because the integrated Coupa-DCR solution is still pending and has not been reviewed for SolutionMap.)

Join us in this unfiltered SolutionMap results analysis from our Q4 2018 dataset as we look at the two top ranked contingent workforce/VMS providers, along with the commentary of the Spend Matters analyst team. Bear in mind, the scores/ratings in this analysis are now approximately 9 months old, and some of the score differentials may have changed — however, we have no reason to believe significantly.

These “Head-to-Head” reports share the insights of each quarterly SolutionMap report for SolutionMap Insider subscribers, providing unique comparative cuts of SolutionMap benchmark data along with the trademark quips that Spend Matters was better known for in its early years. So buckle your seat belt, prepare for some real data and expect a few sparks to fly as we pit Beeline and Coupa against each other in the vendor management system evaluation ring.

Not yet an Insider member? Here’s a preview: In certain temp staffing categories — which include Supplier Management, Candidate Evaluation/Selection/Submissions, Change Order Management, Engagement Management, On/Off-boarding, Rate Management, Requisition Creation and Approvals, Time and Expense and Worker Compliance — Beeline convincingly comes out on top. In others, it’s darn close, with Coupa coming out on top, or the two achieving a statistical tie. And in at least one area, Beeline delivers an unquestionably superior score.

Overall, the results suggest that the right solution will vary based on different organizational requirements. There’s no debate that VMS/temp staffing selection processes will reward procurement organizations that tailor provider selection to their specific needs.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: June 2019

Welcome to the June 2019 edition of Spend Matters Insider’s Hot List, a monthly look at the contingent workforce and services (CW/S) space that’s available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments in the CW/S space. Uber, Deliveroo, Doordash and Fiverr are among the companies making news.

Businesses, Just Turn It On. Go with My Favorite Persona — Turn-Key

Andrew Karpie

When considering a technology solution, businesses trying to maximize their objective functions face trade-offs among different factors, including costs, capability, speed and risk.

I’ve been thinking about this as the analysts at Spend Matters consider their favorite SolutionMap persona: Nimble, Deep, Turn-Key, Configurator, CIO Friendly as well as Optimizer for sourcing providers and Global for CWS vendors. The first two personal essays on buying personas went Deep and with Configurator.

I’m going with Turn-Key, and here’s why.

Upwork’s Share Price Slumps, But Online Staffing Platform Soldiers On (Part 2)

independent workers

In Part 1 of this two-part Spend Matters PRO series, we discussed what might have been behind Upwork’s share price decline following its report of Q1 2019 financial results, and we came to focus on potential investor concern about growth deceleration over the past several quarters. We could not say that this was what led to the share price decline, but that was our main finding from the 10-K filing.

Upwork’s actual revenue (to be distinguished from gross services value, or GSV) represents the transactional and service fees that (business) buyers and (work/service) sellers are charged when they use the platform (these can take a variety of forms). Upwork has stated that the majority of its total revenue is comprised of the service fees paid by freelancers as a percentage of the total amount that supply-side freelancers charge clients for their freelance services and, to a lesser extent, payment processing and administration fees paid by buy-side clients.

Growing revenue therefore depends on the volume/value of work/services transactions on the platform (i.e., platform liquidity) and pricing (i.e., the structuring and setting of transactional fees and the fees for Upwork services). Upwork may be able to influence revenue by market segmentation and tuning of offers, quality of service (broadly speaking), structuring and setting of fees (given degrees of price elasticity), and lastly, execution of sales, marketing and support services.

In Part 2 of the series, we will review the handful of updates pertaining to growth initiatives that Upwork provided in its financial results report and earnings call. We will also offer our own perspective on Upwork’s current position as a high profile player in the changing contingent workforce space.

Upwork’s Share Price Slumps, But Online Staffing Platform Soldiers On (Part 1)

Being a public company is not always easy, with performance vs. market expectations being put under the microscope every quarter. And Upwork (NASDAQ: UPWK), the global online freelancer marketplace and managed services provider, found that out Wednesday, May 9, after it announced its Q1 2019 financial results, which seemed to pack few, if any, surprises.

At the same time, while the shares fell swiftly from just over $20 to under $17 in after-hours trading, it bears remembering that, just months ago at the start of October 2018, Upwork offered its IPO shares at $15. Though this may not be a consolation to investors who acquired shares when the stock was trading between $20 and $25 in February and March, it may be somewhat reassuring for more conservative investors that expect a company’s share price to be linked to its fundamentals, including uncertainty.

In Part 1 of this two-part Spend Matters PRO series, we attempt to understand what was revealed shortly after 4 p.m. Eastern time May 9, that caused such disappointment among investors. In Part 2, we will look at Upwork’s several updates to new growth initiatives in the business (e.g., the creation of four service/pricing tiers for buy-side businesses), and we will offer our own perspective on Upwork’s current position as a high profile player in the changing contingent workforce space.

Shiftgig Changes Course — What Can We Learn? (Part 3)

In Part 1 of this three-part Spend Matters PRO series, we overviewed Shiftgig’s seven-year evolution from an online marketplace/online staffing firm that matched hourly workers and open shifts that were offered by businesses (mainly in the hospitality, food and event industries). The company recently completed its pivot to a pure-play software solution/technology provider with the sale of the staffing operations part of its business to Headway Workforce Solutions and LGC Hospitality (the two established staffing firms will be using Shiftgig’s on-demand worker matching technology solution called Deploy). In Part 2, we talked with Shiftgig’s current CEO, Rick Bowman, about the company’s shift, its emergence as a technology solution provider and where Shiftgig may be heading now that the pivot is effectively complete.

In this final part of the series, we will step back and take a more analytical perspective and look at Shiftgig’s strategic shift in the broader context of the evolving contingent workforce technology solution and intermediation space. The Shiftgig story may raise more questions than answers. But they are good questions, such as: What happened? Was it Shiftgig’s execution or its strategy? What is the optimal role of online marketplaces and staffing firms? How is technology reshaping the established contingent workforce supply chain?

Shiftgig Changes Course — What Can We Learn? (Part 2): A Talk with CEO Rick Bowman

Spend Matters recently had the opportunity to talk with Shiftgig CEO Rick Bowman, who joined Shiftgig as its CTO in mid-2017 before becoming CEO in July 2018. Since then, he has led the company through the launch of Deploy, its technology platform, and the recent deals with Headway and LCG, discussed in Part 1. For this Part 2 Q&A, Bowman provided his refreshing insider perspective on what has been happening at Shiftgig and what it means for the business. Part 3 will conclude with our analyst commentary on Shiftgig’s strategic shift in the broader context of the evolving contingent workforce technology solution and intermediation space.

Upwork’s Q1 Financial Results Are In — As Growth Continues

Upwork, a global online freelancer marketplace and managed services solution, on Wednesday announced its Q1 2019 financial results, which reflected continuing double-digit topline growth. Upwork’s shares on Thursday were trading early at $18.80, down from Wednesday’s high of $20.90. Upwork reported a gross services value of $487 million for the first quarter, up 21% period over period (Q1 2018). The company posted $68.9 million in revenue for an increase of 16% over Q1 2019 (and fitting nicely into last quarter’s guidance range).

Microsoft 365 Freelance Toolkit: Retooling How Enterprises Work (Part 4)

talent management

Previously in this series, we took a deep look into the Microsoft 365 freelance toolkit: what it is, how it organically took shape inside of Microsoft and how the supplier/partner collaboration with Upwork established a complete set of enterprise-grade, full lifecycle source-to-pay capabilities for the engagement of remote/online freelancers.

— In Part 1, we took a “product development perspective,” focusing on and explaining the toolkit itself. In addition, based on our interview of Paul Estes (Gig Economy strategy lead at Microsoft and the product lead of the Microsoft 365 freelance tool kit initiative) we also looked at how the toolkit was conceived and how it evolved from a set of internal of capabilities at Microsoft into a new solution for Microsoft customers.
— In Part 2, we took a “procurement perspective.” Based on our interview of Chad Nesland (Microsoft’s director of strategic sourcing and the procurement lead in the Microsoft Gig Economy initiative), we looked at how procurement, from the very start 2 years ago played a key enabling role in the cross-functional team and process that guided the evolution of the toolkit from idea to customer solution.
— In Part 3, we took a “partner/supplier perspective.” Based on our interview of Eric Gilpin, (SVP at Upwork Enterprise), we looked at the Microsoft 365 freelance toolkit coupled with the capabilities of Upwork Enterprise. We also examined Upwork’s role as a strategic supplier/partner, what Upwork brought to the table and what the partnership has meant for Upwork itself.


In this briefing, Part 4, we step back and take an analyst’s perspective on the Microsoft 365 freelance toolkit and Upwork partnership, offering our observations and potential insights for procurement and HR practitioners as well as other executives/managers who are grappling with how to address and optimize the use of freelance talent in their organizations. Taking things up a level of abstraction, we provide a more comprehensive business context; we highlight and discuss a number of important aspects of the Microsoft 365 freelance toolkit and the more comprehensive solution that includes Upwork Enterprise; and we suggest what possible opportunities and considerations executives/practitioner could encounter down the road.