In wake of Covid-19 windfall, Fiverr to raise $700 million at $10 billion valuation

As the employment market fell into disarray, the freelancer marketplace platform thrived, reaching 77% growth

Nasdaq-traded and Israeli founded online gig marketplace Fiverr Int. Ltd. is in the process of raising $700 million dollars in a follow-on offering after its stock price spiked nearly tenfold over the past year. Shares of the online platform that connects freelancers and solopreneurs of all sorts to employers are currently being traded at roughly $280, reflecting an enterprise value of $10 billion.

 

J.P. Morgan Securities LLC, Goldman Sachs & Co. LLC and Morgan Stanley & Co. LLC , Wall Street’s biggest investment banks, are acting as book-running managers for the proposed offering. The proposed public offering comes on the heels of the 460 million senior convertible notes offering last October, leaving it with more than $700 million in its coffers.

 

Fiverr opening the trading day at the Nasdaq.:

Fiverr was one of the standout Israeli companies that not only wasn’t hurt by the Covid-19 pandemic, but was given a major boost by it. With businesses everywhere being forced to downsize their workforce and transition to remote work, the freelancer ecosystem thrived and Fiverr’s platform was there to provide solutions for the organizations as well as the individuals who needed to take on new projects.

 

The company finished out the year with 77% growth in revenues, amounting to $189.5 million and for the first time becoming cash flow positive. The company’s adjusted EBITDA in 2020 improved to $9.1 million, compared to $18 million in 2019.

 

The bottom line is that by U.S. accounting standards Fiverr is not yet profitable, though its GAAP net loss in 2020 was $14.8 million compared to a net loss of $33.5 million in 2019.

 

Alleviating concerns over its momentum being a one-off caused by the unique circumstances of the past year, Fiverr’s reports included a positive forecast for 2021 as well. Though its growth rate is expected to subside a little, at 46-50% it can still be considered high, leading to projected full-year revenues of $277 million- $284 million and adjusted EBITDA of $16 million -$21 million.