While 2020 may be one of the most challenging years for business in recent history, some companies are emerging from the crisis smelling of roses. A little more than a year after going public on the New York Stock Exchange (NYSE), freelancer marketplace Fiverr is launching a new platform aimed at helping larger businesses manage and collaborate around freelancer-powered projects.
Fiverr has climbed 678% this year. In this analysis, we examine if the growth can continue in the short-term and also post-COVID. Specifically, our research shows that Fiverr is leading its industry and outpacing its primary competitor, Upwork. We look into why this might be and what the future could look like.
Fiverr’s platform transforms the traditional freelancer staffing model into an e-commerce-like transaction. The company’s model is known as a Service-as-a-Product (SaaP) offering, where sellers can list their services in over 300 different categories and buyers can easily find and purchase these services with the click of a button. Fiverr’s platform is a key engine in the rapidly growing gig economy, which is a free market system based on flexible, temporary, or freelance jobs.
Facts and Figures About Fiverr
- Fiverr was launched in 2010 and claimed to be hosting over 1.3 million gigs.
- The company’s total funding was $20 million with investors like Guy Gamzu, Accel Partners, and Bessemer Venture Partners.
- Fiverr released its iOS app in December 2013 and Android app in March 2014.
- Fiverr also launched Fiverr Pro in October 2017 that has a curated cult of freelancers.
- By acquiring VeedMe in 2017, Fiverr has deepened the capabilities of videographers.
- In 2018, Fiverr acquired AND CO.
Massive Global Opportunity
US freelancers contributed $1.28 trillion to the American economy in 2018, a number nearly equal to the total GDP of Spain. While the gig economy was already a vast industry poised for explosive growth, the seismic trends toward remote work and more flexible working models brought about by the COVID-19 pandemic has accelerated the growth trajectory.
The company had a successful IPO in June 2019, with the stock opening 24% above the initial-public-offering price and closing at 90% higher than the IPO price.
Fast forward to 2020 and COVID-19, and here’s a quick update on what Fiverr growth looks like:
- 82% increase year-over-year (YOY) in sales during Q2 alone
- 28% increase YOY in active buyers during Q2 alone
- Achieved profitability, 3 years before previous estimates
This rapid growth is attributed to a variety of factors. For one, more businesses are looking to outsource work to freelancers rather than hiring new employees. And more professionals are looking to supplement their income with side hustles.
- Fiverr follows a two-sided digital marketplace business model
- It started by a simple idea: make it possible to purchase any digital service or goods, just like we do for physical stuff
- As a marketplace, it grows on top of network effects. Those network effects can be engineered to create a flywheel or virtuous cycle of growth
- Marketplaces usually rely on as many value propositions as many are the key players interacting on the platform. As a two-sided platform Fiverr has to offer a compelling value proposition to both buyers and sellers
- As the company has not a direct sales force it spends most of its resources in acquiring buyers through digital acquisition channels, like search engine optimization, search engine marketing, and social media
- The company still runs at operating loss, which makes its business model still lacking the profit formula
- Any company has to have a few key metrics to assess its success over time. Fiverr in particular looks at the repeat buyers and the spend per buyer as critical metrics
What is Fiverr?
At its core, Fiverr is an online marketplace for professional freelancers to make their services available and accessible to businesses. It is where marketers, tech-gurus, content strategists, and even artists like songwriters come together to post their offering as a Gig and connect with potential buyers without any unnecessary friction.
Founded in 2010, Micha Kaufman and Shai Wininger, Fiverr has become a major player in the freelancing industry with offices in NYC, SF, Orlando, Phoenix, London, Berlin and headquarters in Tel Aviv.
In 2019, Fiverr went public and priced its IPO at $21 per share, raising around $111 million in a single day.
Fiverr’s Market Leading Position
This data points to a positive future for Fiverr, as the internet has played a huge role in the freelancing industry and the growth of the gig economy. Payoneer’s Freelance Income Report shows that more than 70% of all freelancers find projects through gig websites. Fiverr is positioned as the premier digital freelancing marketplace based off its tremendous topline revenue growth and user growth. Global internet and engagement trends from Alexa show Fiverr’s site currently ranks 195th in traffic and engagement over the past 90 days.
Fiverr’s ranking has improved 102 spots over the past 90 days and is near its peak levels.
In comparison, Fiverr’s biggest competitor, Upwork, ranks 592nd in global internet traffic and engagement over the past 90 days and has improved 59 spots.
The Fiverr app is currently ranked 39th in “Business” on Apple’s app store and 26th on Google Play, while Upwork’s app is ranked 136th and 123rd respectively.
Freelancing has become a major source of side-hustles these days and the entrepreneurs are also looking forward to avoid spending money on employment for getting small jobs done. If you’re intrigued enough by the startup idea of Fiverr and the success and long vision behind it, you can develop your very own freelance platform to this using Fiverr clone.
Fiverr clone by NCrypted Websites is a ready-to-deploy online marketplace clone script that enables you to start your business similar to Fiverr. It provides you with all the features of Fiverr. Our Fiverr clone script can be customized according to your personal business needs. Using our clone can help you save time and money that you otherwise waste on website development on your own.