In 2019, it seems like a tech unicorn goes public every other week.
The latest on-demand startup launching its IPO is Fiverr, the Israeli-based platform that matches up freelance creatives with customers around the world.
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Founded in 2010 in the wake of the recession, the company promises clients in need of completed projects a rate of $5 per job, which is how it got its catchy name. Fiverr celebrated its listing on the New York Stock Exchange (NYSE) on Thursday, with the public eye now on it more than ever.
Now, its co-founder and CEO Micha Kaufman is promising the company will turn a profit in the near future, a feat that recently-gone-public Lyft and Uber haven’t been able to do.
Kaufman told Tech Crunch that unlike ride-hailing apps, what differentiates Fiverr from other on-demand services is its ability to match freelance workers with the type of projects they’re passionate about at the rates they require.
“I think that if you have a market that pushes for bidding, then definitely, yes, there’s a downward pressure,” he said. “In a market where freelancers get to define their own scope, timing and price, you see the opposite trend. What we’re seeing is freelancers all around the world making more and more money every year. It’s a counterintuitive, or countercyclical rather, race to the top.”
You may remember Fiverr as the startup that gained notoriety for its tone deaf subway ads, which glamorized under-eye circles and “eating coffee” for meals. Since its debut, Fiverr has been criticized for its contribution to the “gig economy” and the havoc this business model has wreaked on the workforce in recent years.
It’s unclear how on-demand services like Fiverr will sustain contract-based employee rosters in the coming years as they embark on the route to profitability. Many of the gig economy’s service providers have begun to fight back against long hours and measly wages. In the wake of the unicorn IPO boom, contract workers could soon be recognized as company employees, gaining traditional wages and benefits.
Last month, the California Assembly advanced a “gig economy” bill to help give on-demand workers more protection and rights. California’s Bill 5 is the first of its kind in the nation to push back on Silicon Valley’s favorite business model. It has inspired other states, like Washington and Oregon, to draw up their own versions of the law.
As on-demand services like delivery apps and Fiverr’s freelance work platform grow, these business practices are likely to gain more scrutiny from the public.