continues roll-up activities — 17 x revenue market cap equals 50% rise in 4 months

Screenshot_57Australian-based online freelancer marketplace platform,, continued on its M&A consolidation path this week, acquiring the assets of Spain-based freelance platform,  This has occurred within a couple of weeks of’s acquisition of the assets of the defunct Israel-based freelancer market place DoNanza.

Note:  All dollars are Australian dollars, unless designated as US dollars with the symbol USD

Since its inception in 2009, has acquired over 10 freelancer platforms, pursuing a unique international consolidation strategy.  The company claims to have over 14 million registered users today across the globe, and the acquisition of Projectlinkr brings on another 140,000 mainly Spanish-speaking users in Europe and South America. As a large global-spanning platform, appears to be very focused on localized portals into its world-wide talent population, a strategy sometimes supported by its acquisitions.  In any event, the roll-up approach is certainly unique in the online work platform space to date  (Note:  as a former analyst at the Canadian company, Constellation Software, Inc, I have seen and appreciate the value-multiplying power of a well-executed, disciplined consolidation/roll-up strategy).

Though smaller than recently merged Elance-oDesk (E-O) in terms of 2014  “Gross Payment Volume” ( was just over $100M USD, while was O-E was 9 times as much), reported numbers of registered users (freelancers + businesses) are more or less on par (over 12M)..  In 2014, it appears, based on published data that posted about 1.6M projects/contests, while E-O posted about 2.8M projects (note: these are postings, not actual projects completed). projects are reported to average just a few hundred dollars (and include lower value crowd contests for things like logos), probably lower than the E-O average.

Screenshot_56But as CEO, Matt Barry, has effectively indicated on a number of occasions, size is not everything (these are my words, not Matt Barry’s). Barry likes to point out that’s goal is to build the global marketplace for all skilled online workers and for small and medium sized businesses anywhere (see graphic left). When I have talked with Matt Barry, I have sensed that his vision of 21st century “globalization” is to build a kind of “global village” for online work and productivity as opposed to creating a procurement channel to satisfy the growing appetite of enormous enterprises for contingent, commoditized labor.  Establishing this kind of mesh network platform for talent and smaller businesses across the world seems to be the aim of To create value for people and investors, Matt might say, does not require enormous “Gross Payment Volumes” at this stage of the game–one must simply get the global platform extended and configured correctly.

In pursuit of this vision, has not been an insatiable consumer of private equity, reporting no external funds raised between founding in 2009 and IPO in late 2013.  In addition, the company does quite well in monetizing its “Gross Payment Volume” into real company revenue (Revenue as a % of “Gross Payment Volume” –the “Take-rate”–has been rising since 2010 and was 25% in 2014).

Screenshot_55 With the 2013 IPO, two years of published, fully-audited financials have revealed a business that is also a “going concern,” that is expanding at about 40% per year, operating at about EBITA and Cash Flow break-even, and (as reported in the most recent annual report) exited 2014 with over $20M in cash on the balance sheet:


An ASX market snapshot of on March 25th 2015 (below) show shares trading at exactly $1 a share and a market cap of $452M (about 17 x 2014 actual “Revenue” and over 4 x “Gross Payment Volume”).


Very noteworthy is that over the past 6 months, the share price and market cap have increased by about 50%.

There are no other publicly traded online work platforms, so information is not available to draw direct valuation comparisons.  But we can compare to Fieldglass acquired by SAP in 2014, at which time some financial data appeared in the press.  Fieldglass a global freelance marketplace platforms like, it is a global VMS or staffing software supply chain provider–so the comparison is somewhat apples and oranges, but perhaps revealing and interesting.  VMS “take rates” of “Gross Transaction Volumes” are notoriously low, and the Fieldglass acquisition was held somewhat in awe for the valuation/sale price of $1B USD. We know from Staffing Industry Analysts that the Fieldglass 2013 “Gross Transaction Volume” was around $18B USD, and another analyst group strongly suggested that the actual Revenue of Fieldglass was growing at about 30% and  running near $100M USD annualized at the time of the acquisition.

So how do the valuation and multiples compare?

  • Fieldglass was supporting a Gross Transaction Value of about $18,000M USD and generating actual Revenues about $100M USD  with a $1,000M USD valuation and a Revenue multiple of about 10 X.
  • is  supporting a Gross Transaction Value of about $ 100M and generating actual Revenues about $22M with a  $450M valuation (just under half of Fieldglass) and a Revenue multiple of about  17 X.

One can argue about what all of this actually means, but it is at least interesting to put the two sets of number side by side and contemplate. One thing is for sure, it is a amazing thing to see value being created by arranging work across the globe using information technology in innovative ways.  And whatever is doing, it appears to be solidly on the path of doing something right.

Just sayin’,




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