More and more young people prefer to work remotely and choose interesting projects by themselves. For this purpose Fiverr created. Let’s take a look into Company’s business model, financial data, risks and opportunities, IPO, shares performance, etc.
Article based on form F-1 filed by Fiverr International Ltd to United States Securities and Exchange Commission. Company’s executives office located in Israel. Company listed in New York Stock Exchange under the symbol “FVRR”.
Main idea behind Fiverr is Service-as-a-Product. Through company’s website and mobile app sellers and buyers of digital gigs can easily find each other. All content categorized into 200+ categories.
Prices starts from $5 to thousands of dollars. Mostly freelancers prefer to search for projects on Fiverr platforms but there also available bigger companies which in search for customers. Since inception in 2010 ,Company facilitated 50+ million transactions for 830000 sellers and 5.5 million buyers. Company mostly generate revenue through transaction fees and service fees.
Market for freelancers growing rapidly and more companies outsource particular projects or tasks. Business owners prefer to search for freelancers with good ratings (freelancers rated by service buyers). Price per project starts from $5 and that encourage bigger among of tasks to be outsourced. This called do-it-for-me movement (when someone can do task for cheaper rate than why to do it by yourself). Talented freelancers live in different countries (in Fiverr presented 160+ countries) and this platform allows to find them. Fiverr made international payments easy and this save time & effort for employers.
Fiverr’s financial data shown net losses of $36 million in 2018 with $75.5 million revenue in 2018.
In 2018 Company spend $26 million for research and development, $49 million for sales and marketing, $20 million to cover general and administrative expenses. Company has not made profit.
Since 2012 average spending per buyer increased from $64 in 2012 to $145 in 2018.
List of risks for Fiverr:
- Company’s growth depends on ability to attract and retain of large community of buyers & sellers.
- Company incurred operating losses in the past and may incur operating losses in the future. In 2018 net losses was $36 million.
- Company may not achieve profitability in the future.
- Business development require additional capital.
- Potential damages for brand value.
- Payment and frauds risks.
- Possible no return on investment.
- Freelancers classified as independent contractors and if this change than it may affect the business.
- Possible software malfunction, cyber attacks, risks related to software development.
- Changes in laws or regulations what could materially and adversely affect the business.
- Company may face intellectual property infringement claims.
- Company rely on Amazon Web Services to operate platforms.
- Company’s executive office in Israel may be affected because of instability in the region.
Fiverr have never declared or paid dividends on their ordinary shares and do not anticipate to pay it in foreseeable future. Company’s current intention is to retain future earnings in order to grow company faster.
As on March 2019 Fiverr had 363 employees. Company’s principal facility located in Israel and consist leased office space. Around the world available offices in New York, Miami, Phoenix, San Francisco, London, Berlin. Company’s CEO and co-founder is Micha Kaufman.
There’s 7 principal shareholders in the Company which in total holding 63.1% of Company’s shares. All directors and executive officers holding 26.9% of Company’s shares.
Fiverr’s stock chart shows high volatility. Company priced it’s IPO at $21 per share. Share price fall around 40% from all time high $44.25 to $25.55. Current market cap around $1 billion.
So far Fiverr’s IPO look good but we should not forget that company is loss making and facing strong competition.
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