Upwork:Competition

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Return to: Upwork / Upwork:Competition Sheet (Old Research)

Our research indicates that Fiverr,Toptal, Freelance.com and LinkedIn are the major competitors of Upwork. We have examined each of them below.

Overview

Competitor Thread level Remarks
LinkedIn 8 LinkedIn is the most dangerous competitor given it's size and influece. We believe it is unlikely that they will offer tools like timetracking in the foreseeable future and will therefore not compete in the same niche as Upwork.
Toptal 6 Toptal is focused on only the top 3% of Freelancers and competes in the higher more professional market segments.
Fiverr 5 Fiverr is well run and the strongest competitor among smaller companies. They compete in a "productized" freelancing segment and don't focus on long term working relationsships.
Deel 4 Deel is operating in the EOR segment. At the current stage this is more an opportunity than a thread
Freelancer.com 3 Freelancer seems to be badly run. We don't believe they are a strong competitor.

LinkedIn

We view the impending competition from LinkedIn as the greatest threat to Upwork's success. LinkedIn is a marketplace that connects job seekers with employers. It has over 875 million members in more than 200 countries[1]. In 2016, LinkedIn launched LinkedIn ProFinder, a free service that enabled freelancers to connect with clients from their locality. The service only allowed freelancers to send up to 10 proposals for free. After that, one needed a LinkedIn Pro subscription which costs around $60, to send more proposals for free. The other key disadvantage of the LinkedIn ProFinder is that it was one-way. That is, freelancers could not send proposals for which they have not received invitations. Also, the freelancer could not review a client[2]. In March 2021, LinkedIn upgraded it to LinkedIn Service Marketplace. The new marketplace enabled freelancers to bid for proposals outside their locality. During the launch, LinkedIn said that the marketplace started with 250 job categories but would later expand to 500 job categories. Six months after its launch, 2 million providers had joined the marketplace, proving it is rapidly growing[3]. We believe if LinkedIn introduces more features common to marketplaces like Upwork, such as payment features, hourly tracker, the ability for freelancers to bid for jobs without relying on invites, etc., LinkedIn Service Marketplace will eat Upwork's market share.

Toptal

[4]


The company's name stands for "top talent". It claims to provide access to only the top 3% of freelancers worldwide. Toptal was founded in 2010 by Taso Du Val and Breanden Beneschott. Taso Du Val has been the company's CEO since its inception, while Breanden Beneschott was the COO until he was ousted in 2018. Unlike the other three Upwork competitors mentioned in this article, Toptal is the only competitor not listed. It has over 500 employees and no headquarters. The table below compares Upwork and Toptal.

CEO ownership 2020 revenue Number of clients in 2022 Time it takes to locate a freelancer Time it takes a freelancer to join the platform Trial window for client-freelance relationship available? Where freelancers come from How much does it charge clients? Does it vets clients? Industries covered Experience needed? Deposit needed from clients? Account types Awards badges? Service fees levied on freelancers Security Job categories Types of clients
Upwork Hayden owns less than 1% of the company $374 million over 818,000 less than 3 days 24 hours No More than 180 countries 3-5% No 12 No No Freelance basic and freelance plus Yes 20-5% of earnings Takes security of the platform seriously More than 90 All types
Toptal Taso owns 100% of the company Around $300 million Over 21,000 90% of clients hire within 24 hours Up to 5 weeks Yes More than 100 countries Unspecified markup fees on top of freelance fees Yes 5 2 years experience needed $500 deposited is needed, which is credited on first invoice or refunded One account type No No service fee No much information about Toptal's security features Only 5 Mainly start-ups and large enterprises
Our assessment of competition from Toptal

Toptal is known for high-quality clients and freelancers. That is why startups and large enterprise clients mainly use it. However, its strict screening process limits the number of users on the platform. Also, the fact that only clients pay transaction fees makes the platform expensive compared to Upwork. Besides, the few job categories on the site make it less attractive. Therefore, competition from this company is moderate.

Fiverr

Fiverr was founded in 2010 by Micha Kaufman and Shai Wininger. Micha Kaufman has been the company's CEO since its inception, while Shai Wininger left his CTO position in 2019 to join his startup company, Lemonade, as CEO. As of December 2021, Fiverr had 787 employees. It is headquartered in Tel Aviv, Israel. Below is a comparison of Upwork and Fiverr.

a. Financial comparisons[5]

UPwork Fiverr
GSV Y/Y Growth Revenue Y/Y Growth Revenue Y/Y Growth
Q2 2022 $1.046 billion[6] 19% $156.9 million[6] 26% $86.7 million 27%
Q3 2022 $1.027 billion[7] 14% $158.6 million[7] 24% $82.5 million 11%
Q4 2022 $1.030 billion[8] 5% $161.4 million[8] 18% $83.1 million 4.2%
Q1 2023 $1.003 billion[9] 0% $160.9 million[9] 14% $88 million 1.5%
Current market capitalization 2021 revenue 2021 Net Income P/S ratio Debt (Q3 2022) Cash balance(Q3 2022) Debt to equity ratio(Q3 2022) GSV(Q3 2022) Active Clients (Q3 2022) Q3 2022 Take rate
Upwork 1.497 billion $502. 8 million -56.24 million 2.491 $564 million $678 million 2.32 $1.027 billion 0.818 million 15.4%
Fiverr 1.078 bilion $297.7 million -24.50 million 3.195 $463.31 million $470.75 million 1.90 $1.119 billion 4.2 million 30.0%

b. Products, Management, and Marketing comparisons[10]

Management CEO's length of service Contract types Freelance fees Client fees Ways of getting hired Bidding fee Quality of customer support Marketing Job Categories Revenue sources Number of freelancers
Upwork CEO is not the founder 3 years Fixed-type and hourly contracts Reducing- tier fee whose range is 20-5% 5% for non-ACH clients and 3% otherwise Sending proposals and answering job invites 2-6 connects Mainly relies on chatbot to offer customer support Its brand marketing has not picked up. It has not seen return on investment yet. more than 90 Generates revenue from marketplace and managed sources There are currently over 2 million freelancers on Upwork[11]
Fiverr CEO is the founder 12 years Only fixed-type contracts 20% 5% Freelancers mainly wait for clients to buy their "gigs" No bidding fee Uses real human to offer customer support but you have to wait for about 24 hours Genius marketing in YouTube. Its time to return on investment, (tROI) in their performance marketing is less than 7 months. more than 250 Revenue mainly comes from transaction-based fees As of May 2019, there were more than 830,000 freelancers on Fiverr[12]
Our assessment of competition from Fiverr

Even though Upwork and Fiverr are on par with each other, Upwork is more attractive to corporate clients due to its lower take rate and availability of hourly contracts. Therefore, as the world shifts to a freelance workforce, Upwork will benefit more than Fiverr. Fiverr may have great marketing, but Upwork recently started spending heavily on brand marketing. If Upwork's brand marketing pays off, it will outperform Fiverr further. We also feel that Fiverr's 20% fee imposed on freelancers is disadvantageous to freelancers who have worked with a client for a long time. That will likely force them to work outside the platform. Nevertheless, in October 2020, Upwork launched Project Catalog, which is similar to the "gigs" feature in Fiverr[13]. If clients were attracted to Fiverr instead of Upwork because of that feature, that is no longer the case.

Deel

Upwork Versus Deel Full-time hiring

Freelancer.com[14]

Freelancer.com is another competitor for Upwork. However, we are not scared of competition from Freelancer.com. It was founded in 2009 by Matt Barrie, its CEO to date. The company was listed on the Australian Securities Exchange in 2013, where it managed to achieve around $1 billion in market capitalization. The company says on its website that it has 63,976,270 employers and freelancers globally. Freelance.com is known for the acquisitions of many outsourcing marketplaces. Some companies it has acquired are GetAFreelancer.com, EUFreelance.com, LimeExchange, Scriptlance.com, etc. It has 286 employees and is headquartered in Sydney, Australia. Below is our comparison of Upwork and Freelancer.com.

Management 2021 revenue 2021 GMV Payment protection available? Fees Job types Job categories Fake Profiles User interface Dispute resolution Ease of creating freelance profile Freelancer Subscription available? Platform usability External job fee Bid limit
Upwork CEO is not the founder $503 million $3.5 billion yes Clients: 3-5%

Freelancers: Reducing- tier fee of between 20-5%

Hourly and Tixed-type(Hourly jobs more than fixed-type jobs) over 90 2-5% User-friendly Good Hard No Fast 3.4% You can only be limited by the number of connects you have.
Freelancer.com CEO is the founder $57.4 million $1.26

billion

yes Clients: 3%

Freelancers: 10%

Hourly and Fixed-type (in equal proportion) Over 1,800 10-20% Less user-friendly Good but more scammers exist in Freelancer.com than in Upwork Easy yes less fast 3% Bid limit depends on membership plan.

Contra.com

Contra is a California based company founded in 2019 by Ben Huffman and Gajus Kuizinas. It has 11 to 50 employees, according to Crunchbase[15]. It has $30 million in Series B funding[16].

Similarities to Upwork

Type of contracts Payment protection Tools Payment options Recommendations Freelancer badges ACH for clients Freelancer bonus Account creation fee Switching accounts
Hourly, fixed and milestone[17] Has escrow service[17] Has payment, onboarding, contract management and search tools[17] Has six payment options[17] Clients and freelancers can give each other recommendation[18]. Has top rated badge[17] Accepts ACH for U.S clients[17]. Clients can send bonus to a freelancer[19] No fee [17] You can switch from client account to freelancer account and vice versa.[17]

How it deviates from Upwork

Commission fee Milestone projects Number of job categories Minimum hourly and fixed contract rate Accept crypto payments? Proposal fee Client payment processing fee Freelancer payment processing fee Tier 2 freelance account fee Upfront fee payment Account needed for invites? Number of users Present in how many countries? Benefits of basic account
Contra Freelancers and clients do not pay any commission to Contra[17]. Milestone projects are approved automatically within three days[18]. 6 main job categories[17] clients pay a minimum of $25/hr or a flat fee of $250. Accepts crypto payments in all countries except U.S[20] Sending proposals is free for clients and freelancers[17]. Clients pay Stripe payment processing fee, which ranges from 2% to 3%[19]. Freelancers pay stripe processing fee that ranges from 0.25% to 1.25%[19]. Contra pro account which gives freelancers additional features charges $12 per month[21]. You can request an upfront fee payment of upto 50%[22]. Invited clients or freelancers don't need to have a Contra profile, they just need to validate the email sent to them and Contra will create an account for them[23]. More than 1 million[16] 139[16] You will get mostly basic features. Most advanced and necessary features such as tools for tracking application and increasing traffic to your profile are in Contra Pro[24]
Upwork Freelancers pay 10% fee while clients pay contract initiation fee of $4.95.[25] Milestone projects are approved automatically after 14 days.[26] 12 main job categories[27] Upwork minimum hourly rate is $3/hr and $5 for fixed contracts. No Charges proposal fee in the form of connects[28] Clients pay 5% fee[29] ACH: Free

Direct to local bank(outside U.S): $0.99 per transfer

U.S. Dollar Wire Transfer: $30 per transfer

Instant Pay for U.S. Freelancers: $2.00 per transfer[30]

Freelancer plus charges $14.99 per month.[31] No upfront payment Clients can only invite freelancers with Upwork account.[32] more than 10 million 180[33] Upwork basic account is almost as good as Freelancer Plus

User Experience

Aron:

  • Unlike in Upwork, you can't apply opportunities before completing your profile or portfolio. Profile creation is difficult since you are asked a lot of details including information on your past clients which you may not have. You are also required to add three projects you have handled before and two services you are offering.
  • Has accepting "new clients" feature like Upwork.
  • Portfolio creation is just like creating project catalogs in Upwork.
  • Got stuck at 78% while creating my profile. Either due to a bug or Contra is limiting signups.
  • You need Contra Pro to track the application process.

References

  1. ↑ https://www.fool.com/earnings/call-transcripts/2022/10/26/upwork-upwk-q3-2022-earnings-call-transcript/
  2. ↑ https://aboundsocial.com/linkedin-profinder-hiring-landing-gigs-more/
  3. ↑ https://www.linkedin.com/pulse/announcing-launch-linkedin-services-marketplace-matt-faustman/
  4. ↑ https://www.upwork.com/resources/upwork-vs-toptal↵↵https://www.toptal.com/about↵↵https://www.benzinga.com/sec/insider-trades/upwk/hayden-brown↵↵https://www.toptal.com/press-center/toptal-applications-surge https://www.upwork.com/resources/upwork-vs-toptal https://www.theinformation.com/articles/at-booming-toptal-no-stock-for-employees-or-investors https://remote.co/company/toptal/
  5. ↑ Source: Fiverr, Upwork https://ycharts.com/companies/UPWK/ps_ratio https://ycharts.com/companies/FVRR/ps_ratio https://www.linkedin.com/in/michakaufman/ https://www.linkedin.com/in/shaiwininger/ https://finance.yahoo.com/quote/UPWK?p=UPWK https://finance.yahoo.com/quote/FVRR?p=FVRR https://www.macrotrends.net/stocks/charts/FVRR/fiverr/debt-equity-ratio#:~:text=The%20debt%2Fequity%20ratio%20can,September%2030%2C%202022%20was%201.90. https://www.macrotrends.net/stocks/charts/UPWK/upwork/debt-equity-ratio#:~:text=The%20debt%2Fequity%20ratio%20can,September%2030%2C%202022%20was%202.32.&text=Upwork%20Inc.,provides%20online%20recruitment%20services. https://seekingalpha.com/symbol/FVRR/valuation/metrics98eef866460e#:~:text=Marketplace%20take%20rate%20for%20the,marketplace%2C%20resulting%20in%20strong%20retention.
  6. ↑ 6.0 6.1 https://investors.upwork.com/static-files/55442716-a174-4096-a8e4-1df1a21b874b
  7. ↑ 7.0 7.1 https://investors.upwork.com/static-files/b5ef19da-22d6-4701-a36b-aa86cb398a6b
  8. ↑ 8.0 8.1 https://investors.upwork.com/static-files/5463bf46-5aea-4c23-b61b-c3f37b4467e3
  9. ↑ 9.0 9.1 https://investors.upwork.com/static-files/02975692-9913-4671-9c20-96528dd88634
  10. ↑ https://www.upwork.com/resources/upwork-vs-fiverrhttps://s23.q4cdn.com/749308338/files/doc_financials/2019/q3/Fiverr-101_FINAL.pdf https://freelancing.school/fiverr-vs-upwork/ https://www.youtube.com/watch?v=Npta6zk_Eu0 https://s23.q4cdn.com/749308338/files/doc_financials/2019/q3/Fiverr-101_FINAL.pdf
  11. ↑ https://investors.upwork.com/news-releases/news-release-details/upwork-expands-support-full-time-hiring-further-unlocking-worlds
  12. ↑ https://www.sec.gov/Archives/edgar/data/1762301/000104746919003139/a2238508zf-1.htm
  13. ↑ https://www.upwork.com/press/releases/upwork-launches-project-catalog-beta-a-new-way-for-businesses-and-independent-talent-to-instantly-work-together
  14. ↑ https://www.freelancer.com/about https://www.linkedin.com/in/mattbarrie/?originalSubdomain=au https://www.linkedin.com/pulse/what-can-upwork-ipo-learn-from-freelancercoms-stock-michael-a-brooks/ https://www.freelancer.com/faq/topic.php?id=36 https://www.freelancer.com/feesandcharges https://www.freelancer.com/hire https://www.freelancer.com/support/payments/milestone-payment-for-employers-2228/ https://www.upwork.com/direct-contracts https://www.freelancer.com/faq/topic.php?id=5 https://www.freelancer.com/about/investor-pdf.php?id=168084920&name=FLN%20ANNUAL_REPORT_2021 https://investors.upwork.com/static-files/881b56ef-812d-456d-89e5-98eef866460e#:~:text=Marketplace%20take%20rate%20for%20the,marketplace%2C%20resulting%20in%20strong%20retention.
  15. ↑ https://www.crunchbase.com/organization/contra-dc5e
  16. ↑ 16.0 16.1 16.2 https://techcrunch.com/2021/11/02/independent-worker-network-contra-goes-commission-free-as-it-secures-new-nea-led-capital/#:~:text=He%20cited%20figures%20that%20said,the%20network%2C%E2%80%9D%20he%20added.
  17. ↑ 17.00 17.01 17.02 17.03 17.04 17.05 17.06 17.07 17.08 17.09 17.10 https://contra.com/
  18. ↑ 18.0 18.1 https://contra.com/blog/Qk77kOsm-boost-your-reputation-with-recommendations
  19. ↑ 19.0 19.1 19.2 https://contra.com/faq?userType=independent
  20. ↑ https://contra.com/blog/7R6UcOUM-contra-vs-upwork
  21. ↑ https://contra.com/pro
  22. ↑ https://contra.com/blog/7bbAUWNb-freelance-rates-how-to-price-your-freelance-services-in-2023
  23. ↑ https://contra.com/
  24. ↑ https://contra.com/pro
  25. ↑ https://community.upwork.com/t5/Product-Release-Notes/Announcing-new-simpler-fees-on-Upwork/ba-p/1273950
  26. ↑ https://support.upwork.com/hc/en-us/articles/360000980507-Review-a-Milestone#:~:text=When%20your%20freelancer%20or%20agency,to%20your%20freelancer%20or%20agency.
  27. ↑ https://www.upwork.com/nx/jobs/search/?sort=recency
  28. ↑ https://support.upwork.com/hc/en-us/articles/211062898-Understanding-and-Using-Connects
  29. ↑ https://support.upwork.com/hc/en-us/articles/4660220468499-Client-Marketplace-and-Contract-Initiation-Fees#:~:text=When%20you%20hire%20on%20Upwork,Marketplace%20and%20Project%20Catalog%20contract.
  30. ↑ https://support.upwork.com/hc/en-us/articles/211060918-Manage-How-You-Get-Paid#:~:text=You%20can%20withdraw%20directly%20to,Wire%20Transfer%20%E2%80%94%20%2430%20per%20transfer
  31. ↑ https://support.upwork.com/hc/en-us/articles/211062888-Freelancer-Plus
  32. ↑ https://support.upwork.com/hc/en-us/articles/211063518-Send-Invites
  33. ↑ https://support.upwork.com/hc/en-us/articles/211067778-Eligibility-to-Join-and-Use-Upwork
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