Yesterday, another gig-economy startup debuted on the stock exchange. Fiverr (FVRR), which is a marketplace for freelance projects, jumped 90% on the day of its IPO. Fiverr set its IPO price at $21 but opened higher at $26.24. The stock surged throughout the day to close near the day’s high at $39.84.
The startup, founded in 2010, had raised $111 million from investors before its IPO. Investors will surely be happy with the company’s IPO.
Why Fiverr is like Uber
While uber is busy comparing itself to Amazon (AMZN), we see a lot of parallels between the ride-sharing giant and the marketplace for freelance projects. First of all, they are the flagbearers of the sharing economy. While Uber (UBER) has made it easy for people to find cabs, marketplaces like Fiverr and Upwork, which went public last year, have made it easy for companies to find freelancers. Second, both of them derive their revenue as a percentage of billing. Third, they are both loss-making. Fourth, they have a long way to go to justify their valuations.
While there are many similarities, the IPO-day performance was different. While Fiverr surged on its IPO day, Uber lost 11% on its IPO day. Will Fiverr keep up the pace? Only time will tell.