Upwork, a network that manages more than $1 billion worth of freelance jobs annually, has reportedly filed to go public later this year. This is according to Recode, which says Upwork will be "a marquee IPO of the second half of 2018."
We don't know the details yet, but it seems virtually certain some people are going to clean up.
That said, it's a bit of a surprise, if you've followed Upwork over the years. The company has its roots in two other freelance marketplaces -- Elance, founded in 1999, and oDesk, founded in 2003 -- that merged in 2013.
Although it's taken on a total of $168.8 million in funding, and "flirted with a billion dollar valuation in the past," according to Recode, even some of its own investors were predicting a downward spiral as recently as 2016.
The most recent revenue numbers I can find for the up-to-now privately held Upwork are its predecessor company's data in 2012: $44.6 million a year, when the company was featured as No. 703 on the Inc. 5000.
In fact, Upwork was on the Inc. 5000 for five years, which is great--but it slipped each time it was listed, starting at No. 110 in 2009 until it disappeared altogether in 2014. I don't know if that's because they stopped asking to be considered.
(I emailed Upwork for comment, but they declined to talk after the IPO report.)
Separately, Upwork was rated the No. 16 employer for Millennials earlier this year. Does that reflect people wanting to work for Upwork as an employee, or else picking up freelance work on the platform as a contractor? I'm also not sure.
Regardless, the fact that Upwork has survived and potentially thrived enough to make it to an IPO is impressive. Its buoyancy might simply be related to the sheer number of Americans who are now working at least part-time as freelancers.
As Mary Meeker put it in her annual Silicon Valley ritual report, freelance workers are growing "three times faster than the growth of the total workforce," which represents a 23 percent increase between 2017 and 2018.
"Upwork has 16 million freelancers, and there are a lot of similar numbers from other players in the marketplace," Meeker said in a May 30 speech. "On-demand jobs are filling needs for workers who want extra income, flexibility, and have underutilized skills and assets."
And Upwork has worked hard to make sure the math works for it. In 2016, the company changed its pricing setup so it makes money on both sides of every transaction: taking a cut of fees charged by freelancers, and also charging a transaction fee for clients.
In fact, for lower-dollar contracts (up to $500), Upwork can wind up making a fee equal to 22.75 percent of the freelancer's fee, simply for setting up the exchange.
So with more stakeholders, will there be pressure to squeeze freelancers even more? Time will tell.
But whether this results in an IPO, or else as Recode hints, in a possible acquisition before the IPO goes through, it looks like it's profit-taking time at Upwork. And that usually means things will never be exactly the same again.