How Upwork Can Leverage The Virtual Company Trend

Mountain View-based Upwork (Nasdaq: UPWK), the largest online marketplace that enables businesses to find and work with highly-skilled freelancers, went public last year. I am a huge fan of this platform, and my company has used it extensively for 15 years. Upwork has just announced its results for the first quarter that missed the analyst revenue estimates.

Upwork’s New Products

Upwork has recently added two more marketplace products to focus further on the larger clients. Upwork Standard has been renamed to Upwork Basic, has zero subscription fee and targets very small businesses and freelancers. Upwork Plus has been launched for small businesses looking to engage freelancers in a self-service mode and has a subscription fee of $50 per month. The Plus plan is basically an upgrade from the Basic plan and provides additional privileges, Connects, and visibility into competitor bids. Both the Basic and Plus plans charge a client payment processing fee and administration fee of 3%. Freelancers working with clients on Upwork Basic and Upwork Plus typically pay 20% for the first $500, 10% for the next $9500, and then 5% for any amount over $10,000 that they bill. The client fee is waived in the Plus plan if the client pays via Automated Clearing House (ACH).

Upwork Business is for mid-market businesses looking for ongoing flexible access to talent that need consolidated billing and a team of advisors to help them set up their freelancer programs. Fee for Upwork Business is $500 per month with a client fee of 10% and a freelancer fee of 10%.

Upwork Enterprise is focused on large businesses that need a more tailored product solution and access to premium talent and compliance services. Pricing for Upwork Enterprise is unchanged; the subscription fee varies based on the complexity of the engagement, freelancer fee is 10%, and client fee is either 10% or 20% depending on whether the client is using the compliance offering or not.

Upwork’s Financials

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