Upwork, a freelancer network that enables businesses to connect with freelancers, is set to have its IPO go live tomorrow.
Originally set for a range from $10-12, then $12-14, Upwork has moved its IPO to $15 at the last minute. This turned a somewhat reasonably priced IPO (let’s not forget that Upwork had a net loss in the six months ending in June of $7.1M) into what we believe at the USA Herald as an overpriced IPO.
Several USA Herald writers also take on freelance work on Upwork. While the platform is valuable, one of the greatest challenges to long-term contracts are the excessive fees that Upwork charges its clientele…which often incentivizes freelancers to work direct with the companies they meet on Upwork. In essence this cuts Upwork out of the supply chain.
I’ve seen this happen on multiple occasions with freelancers that have opted to take the risk of having their Upwork account suspended because they felt Upwork was charging them excessively to work for businesses on its network…many times in excess of 10% of their pay. Companies are also charged continued fees to pay freelancers on the upwork network, which in turn incentivizes companies on larger contracts to deal direct with freelancers they’ve met off of Upwork.