82% GROWTH

It had a run of 545% Taking the stock from $ 24 to $ 156 THIS YEAR

Revenue grew 82% in Q2 ’20 Gross Margins stand at 83%

As JOBS and GIGS move online It is BOOSTED by “Remote Everything”

Can it KEEP UP

Here is a SHORT thread

$FVRR Fiver was founded in 2010 by Micha Kaufman and Shai Wininger The website matches freelancers selling digital services to buyers

Simplicity and standardisation were the two KEY elements that made $FVRR the #198 in the U.S. (Alexa rank)

How was it done earlier

The conventional freelancing website works this way

Buyers post a job they need to be done

Multiple freelancers apply and “sell their services” to the prospective buyer

Using ratings and some comments on previous jobs, the buyer can filter through freelancers

After a discussion / interview the buyer selects a freelancer

It is not hard to see This process is the same as recruiting an employee for your company / project

Is this easy? Well, no Why?

Freelancers may apply for jobs they may not be optimally fit for

Buyers have to filter trough multiple job offers that do not come in 1 standardised format

Freelancers have to spend considerable time reading and reviewing job postings they could be a fit for

Each buyer posts its job in a different format, complicating the job of freelancers

In the end This creates a lot of uncertainty and frictions for both buyers and freelancers

And that is exactly what the $FVRR founders wanted to change

Here is what they have to say in $FVRR S-1 Filling

“We started with the simple idea that people should be able to buy and sell digital services in the same fashion as physical goods on an e-commerce platform.”

“On that basis, we 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.”

Turning the freelancing industry on its head $FVRR became the “$5 micro-services” platform

Where freelancers listed THEIR SERVICES for $ 5 and buyers could simply buy what they needed

No more job proposal Freelancer filtering Interview Endless discussions on the scope / scale of project

This is what led Adam Fisher from Bessemer Venture Partners to invest in $FVRR back in 2011 Here are some key highlights

In December 2010, the company was counting 60k transactions / month and had 8 employees

At first, every gig was priced at $ 5 This forced sellers to differentiate based on creativity / quality and made pricing fully transparent

This fixed & simple price tag made sure that customers were coming back as it was a “no-brainer” to buy small gigs over and over

The $ 5 price limit was removed early on in 2011 but the spirit of transparent and simple pricing STAYED

$FVRR reached 100k buyers in 2011 and 1m in 2014

In 2018 $FVRR reached 5m buyers and buyers could purchase services from over 200 categories

Here is the full Bessemer Venture Partners memo https://www.bvp.com/memos/fiverr 

That’s all good But how does $FVRR make money

Sellers get 80% of the total order value $FVRR takes an 20% commission on selling price

Buyers pay $ 2 in Service Fees for orders under $ 40 and 5% of order value above that

How doest that translates into sales

$FVRR is speeding Some key insights from Q2 ’20

Revenue grew 82% YoY reaching $ 47m

Active buyers grew 28% YoY to 2.8m, implying net adds of 300K in Q2’20 vs Q1’20.

Quarterly Adjusted EBITDA of positive 6.7%

What about GMs, OMs and EBITDA?

Gross margins of 84% (increase from 81% in Q1) providing a Gross Profit of $ 39m

Operating expenses grew 32.9% YoY while revenue grew 82% in the same period

$ 127m in cash for a total of $ 290m current assets versus $ 117m in current liabilities

For Q3 $FVRR has raised its guidance and now expects revenue to grow from 72 to 76% by Q3 2020

$FVRR looks good on paper Compelling solution and huge growth Let’s review 2 key questions

Is the total market for freelancing services growing?

Are customers preferring $FVRR over alternatives such as $UPWK

Market is growing as both employees AND employers are turning to freelancing

The pandemic accelerated some changes that were well underway Flexible working

In the U.S. freelance work contributed to $1.2 T to the economy An increase of 22% compared to 2019

36% of the U.S. workforce Representing 59 m people performed freelance work in the past 12 months

50% of the Gen Z (aged 18 to 22) have freelanced in the past year and 36% of these started during the pandemic

This is further supported by the fact that 92% of millennials identify flexibility as a top priority when job hunting

Employers and hiring managers as well are looking for more flexible sources of work

73% of hiring managers are increasing their use of indep. professionals

62% of hiring managers said they prefer to engage with indep. professionals to get jobs done quickly

As employees and employers turn to flexible sources of work Is $FVRR winning

$FVRR counted 61m visits in Aug ’20 vs 43m in Mar ’20 42% increase

$UPWK counted 33m visits in Aug ’20 vs 30m in Mar ’20 10% increase

http://Freelancer.com  counted 10m visits in Aug ’20 vs 11m in Mar ’20 10% decrease

$FVRR average visit duration stood at 23 minutes and had 9.3 pages per visit

$UPWK average visit duration stood at 12 minutes and had 8.4 pages per visit

http://Freelancer.com  average visit duration stood at 14 minutes and had 10.5 pages per visit

Soooo the freelance market is growing fast and got a pandemic related boost as *BOTH* employers and employees looked for more flexible ways of working

On top of that, $FVRR is delivering on it strategy to move UPMARKET by increasing the spend per buyer

What’s more ? Fiverr has just launched Fiverr Business Here is what Micha Kaufman ( CEO of $FVRR ) told TechCrunch

“2020 marks the beginning of a decade where businesses will invest and learn how to truly integrate freelancers into their workflows”

“Organisations require tools to manage their team accounts, defining projects, assigning budgets, tracking progress and collaborating internally”

THE BOTTOM LINE

The freelance market is growing fast Driven by demand for more flexible ways of working from employers & employees

$FVRR has become the LEADING freelancing platform by simplifying the offering and pricing Becoming the #eCommerce of freelancing

$FVRR started with $ 5 gigs but quickly evolved to pricier jobs and now generates $ 184 in sales from buyers Up from $ 119 in 2017

Given the solid financial data, leading position and strong future prospects, we are long $FVRR

$DDOG is on our watchlist To Be Reviewed SOON

Please note that this is not a recommendation to buy - You are responsible for conducting your own research

Here is a review for $FVRR Would love to hear your take on the matter

@AnthonyOhayon
@TheMarkCooke
@jeremymday
@ArtJonak

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Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.

Sources

✑ Investor presentation

✑ Company website

✑ TechCrunch

✑ Bessemer Venture Partners

✑ Forbes

✑ McKinsey & Company

✑ Alexa

✑ SimilarWeb