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Shares of Fiverr (FVRR) skyrocketed 90% on the freelancer match-making platform’s public debut Thursday.
“Fiverr is a very high growth business with very strong repeat behavior,” Fiverr founder and CEO Micha Kaufman told Yahoo Finance’s On the Move, promising investors the company will make money.
Fiverr is an online platform that lets people purchase services from freelancers, everything from logo design, marketing even voice over work. There are 200 different categories available and Fiverr connects people in more than 160 countries. “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,” the company said.
Fiverr’s S1 filing showed that it generated more than $75 million in revenue last year, a more than 44% increase over 2017. But Fiverr’s losses also grew from $19 million to $36 million during the same period.
“If you look at our EBITDA, you see that the negative EBITDA is shrinking,” Kaufmann said. Investors seem to agree that’s a sign the firm is headed in the right direction. The company’s initial public offering priced at $21 a share Wednesday and opened at $26 Thursday morning. Shares closed Thursday at $39.90, up more than $18 a share.
Industry still in its infancy
Kauffman said there is plenty of room to grow because “the addressable market for just the categories in which Fiverr operates is over $100 billion in the U.S. alone.” He said the online commoditization of freelancer services and business connections is still in its infancy. “So, this is like 1995 for e-commerce,” he said.
According to analysts, Fiverr competes with firms like Upwork (UPWK) but Kaufman said he doesn’t have to “eat anyone’s lunch” to succeed. “The vast majority of activity or freelancing is offline, we view the offline as being our biggest competitor.”
The key he said is convincing old school business to use Fiverr, “an experience that is as easy as buying something on Amazon,” he said. “You browse, you search and you click order. It is that simple. It takes on average 15 minutes to place an order on Fiverr. This is unmatched,” he added.
Based on its strong public debut, investors appear to agree.
Adam Shapiro is co-anchor of Yahoo Finance On the Move.