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Why the Freelancing Market Isn’t Slowing Down

Many people would love the freedom to be their own boss and set their own schedule. However, not everyone has the means or desire to start their own business. 

That is what makes freelancing so appealing — it allows you to be your own boss and work as you please without the headache that comes with running a business.

Freelancers are typically self-employed (unless represented by a company or employment agency) and commonly seek work such as writing, computer programming, web design, graphic design or video production. 

Freelancing has quickly become one of the most popular ways for people to work. The annual “Freelancing in America” study from freelancing platform Upwork found 57 million Americans freelanced in 2019. This figure, representing 35% of the U.S. workforce, is up from 53 million Americans in 2014.

Source: Upwork Research

Just last year, freelancing generated nearly $1 trillion in income, which is more than industries like construction, transportation and mining and equivalent to about 5% of the U.S. GDP. 

Younger Americans are much more likely to be freelancers. The survey found 53% of Gen Z and 40% Millennials have done freelance work. But you don’t have to be young and tech savvy to do freelance work, either. The survey also found that 31% of Gen X and 29% of Baby Boomers have freelanced.

“The stronger economy provides more optionality and opportunity, and as a result, more people are seeing freelancing as a long-term choice, and fewer are doing it on a temporary basis,” Upwork Chief Economist Adam Ozimek said in an Upwork press release

With job losses having recently surged as a result of the COVID-19, many displaced workers may be inclined to start freelancing or freelance on a full-time basis. 

So, how can you invest in this growing trend?

Freelancing is an increasingly popular way to generate income. Upwork (UPWK) is the largest freelancer marketplace in the world. The platform has more than 12 million registered freelancers and more than five million registered clients, including companies such as Microsoft and Airbnb. Upwork’s marketplace covers over 5,000 skills across more than 70 categories of work. 

Upwork went public in October 2018, jumping more than 50% on its first day of trading. Shares currently trade well below their all-time high of $25 per share, which was reached shortly after the IPO. Upwork now trades under $10 per share, giving the company a market capitalization of just under $1 billion on $300 million in sales. 

Source: Upwork Research

The other publicly traded freelance marketplace you can invest in is Fiverr (FVRR). Like Upwork, Fiverr offers countless freelancing opportunities such as graphic design, writing, digital marketing and programming. 

The Israeli company went public last June, jumping more than 90% on its first day of trading. Like many other recent IPOs, the stock came down significantly following its IPO. However, Fiverr shares have since rebounded from their low below $20 per share in October and now trade within 10% of their high. 

Fiverr’s valuation is a bit more rich than Upwork, trading at a market capitalization of nearly $1.25 billion on just over $100 million in sales. 

With an increasing number of people opting to do freelance work, it seems this trend isn’t slowing down any time soon. As companies continue to cut costs and lay off employees, it’s likely many of them will also turn to freelancers to work on specific projects that were previously handled by full-time employees.  

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