One of the most significant initial public offerings (IPO) in quite some time happened in early October. The freelancing platform UpWork (NASDAQ : UPWK) went public and experienced a 50% increase in its share price.
The company is riding a new wave of independent contractors and freelancers that are driving the world economy.
What Is UpWork?
UpWork was formed in 2014 when Elance and oDesk, two of the pioneers in the freelancing space, merged to form one of the largest freelancing platforms in the world. Freelancers (and businesses) have been flocking to the sight ever since.
Following the merger, UpWork has raised over $100 million from outside investors with its biggest stakeholders being Benchmark (15%), Sigma Partners (14%), and T. Rowe Price (10%).
UpWork went public with an IPO price of $15 a share. On the initial day of trading, the shares hit $23 a share. A 50% price increase.
Dominating The Gig Economy
As more and more young workers are turning away from traditional career paths, sites like UpWork are benefiting from this trend. These freelancers want freedom and a flexible work schedule. UpWork provides them with a platform to carve out their own nigh in their chosen industry.
While there are a number of platforms out there that allow individuals to participate in the gig economy, Uber, Fiverr, and Airbnb, UpWork is the largest platform dedicated to bringing freelancers and companies together to complete both short and long-term projects.
By using a rating and feedback system, UpWork allows freelancers and companies to build trust across the platform and gives users assurances that they are dealing with reputable partners. Because of this, UpWork has become one of the most profitable sites of its kind.
According to a recent study conducted by Harvard University and Princeton University economists, 94% of the net job growth over the past decade has come from “alternative work” and consultant labor. UpWork is uniquely positioned to take advantage of that trend.
They have also determined that the freelancing economy will be the fastest growing segment of the US economy going forward.
Just as the US economy moved from an agriculture-based economy to an industrialized one in the 18th to 19th centuries, we are now seeing a shift from corporate-dominated economy to one of freelancers and contract workers.
As the very fabric of the global economy shifts toward independent workers, UpWork and sites like it are poised to be dominant players in this new fashion of working. As their IPO would indicate, Wall Street is placing its bets on this developing trend and sees it as a very profitable endeavor.