Fiverr is Coming to the Stock Market and Here’s Why Investors are Excited for the IPO

Business August 29, 2019

If you’re a freelancer, then you’ve definitely heard of Fiverr. It is an online marketplace that matches freelancers with potential clients, or rather, employers. The marketplace is mostly for creative projects, including graphic designging, illustrations, voice-overs, translations, to name but a few.

Micha Kaufman, Fiverr’s founder and CEO

Fiverr, a startup based in Israel, is soon going to be trading on the NY Stock Exchange. The company intends to go public under the sticker FVRR. Who’ll lead the IPO, you ask? Fiverr is in good hands, with Citigroup and JPMorgan leading the public offering.

$800 million valuation

In 2015, the startup was worth $262 million, but Bloomberg reports that in the initial public offering, the company will seek $800 million in valuation. Four years is a long time in the freelance world, and it wouldn’t be that crazy an assumption that the startup is worth $6 million more compared to its 2015 value.

Along with Bessemer Venture, Accel backs the startup, and they’ve managed a seed round. PitchBook reports that Fiverr has raised a total of $110 million since its founding.

Kaufan makes money by providing a platform for clients and freelancers to transact

Being a freelance marketplace, the company makes money by offering their services as its product. Employers (clients) pay their employees (freelancers) via Fiverr, and the platform takes a certain percentage of the amount paid. Additionally, they also earn from the transaction fees when users move funds via their site.

The company generates a lot of revenue, but it has unfortunately made losses in the past two years. In its filing, it was revealed that they raised $75.5 million in revenue in 2018, which was a 44.9% improvement from 2017 whose revenue was $52 million. However, the year in which they raised more revenue also saw them lose $36 million compared to 2017’s $19 million. No wonder they want to go public.

Going public will return Fiverr to profitable ways

Tech Deals Worth Big Bucks

2019 seems to be quite the year in the United States in terms of tech deals involving millions and billions of dollars. Israeli companies have of late shown increased interest in the country’s markets. Tufin, a cybersecurity company, just started trading last month, and reports say that Payoneer may be in the works for possible listing. Other sources report that Zerto could be well on its way to the NY Stock Exchange, but we’ll just have to wait and see how that plays out.

For investors, this year couldn’t go any better. Without a doubt, many people have poured money into these company, and going public means hefty returns for them, no matter how the IPOs go.

Take Uber, for example. Although the IPO didn’t quite go as planned, it still made its founders and earliest investors a significant amount of money. You wouldn’t hear any of the company’s celebrity investors such as Jay-Z and Ashton Kutcher complaining, even though the IPO fell way short of the tech company’s $120 billion valuation.

And if you feel that $120 billion was an exaggeration on the banks’ part, how about the $80 billion valuation just before the company went public? The IPO managed to raise just $8 billion, but it isn’t as bad as it sounds. Having a billion-dollar company is no small feat!