This week, Fiverr, an online market for small services, announced $60 million in new financing led by Square Peg Capital. Earlier backers Bessemer Venture Partners, Accel Partners and Qumra Capital also chipped into the round, which brings the company’s total funding to a pretty significant $110 million.
We talked with founder and CEO Micha Kaufman about what those investors are backing exactly, how and why five-year-old Fiverr just changed its pricing structure, and whether an IPO is in its sights yet. Our chat has been edited for length.
First, how big is the company at this point? Give us some stats.
We have more than 200 people in five offices, including here in Tel Aviv, New York, Chicago, Miami, and San Francisco. Fiverr generates close to 1 million transactions a month, and we’re truly an e-commerce company, as opposed to a labor marketplace. It’s a catalog business.
Your Chicago office came together through an acqui-hire of a small design house called Cuban Council, from which Google also did some recruiting.
Yes, part of the business was acquired by Google, and we took one of their founders and a few of their team and started our own studio of gifted designers.
With $60 million in the bank, are more, bigger, acquisitions on the horizon? There are a whole lot of companies catering to freelancers at this point.
Doing acquisitions is one way to accelerate our growth, and there are vertical businesses that might help us gain market share in particular categories or with our core business of e-commerce and recommendation systems and so forth, so that’s definitely on our radar.
On a macro level, I do think we’ll see something similar to what’s gone on with e-commerce, where some startups break apart, then the market starts to consolidate through M&A and companies starting to wind down. But 97 percent of freelancing is still happening offline. A small minority happens online. So this is still not a very mature market where you need to aggressively compete against someone to gain market share. It’s more of a land grab right now, and the opportunity is immense.