Fiverr, the Israeli company whose online platform links freelancers with companies looking for temporary workers, got off to a roaring start on Wall Street Thursday as its share price jumped more than 60% in its first day of trading on the New York Stock Exchange.
The shares were priced in the initial public offering of 5.26 million shares at $21 each, above its expected range of $18 to $20 a share, raising just over $110 million. They opened for trading on Thursday at $26 and by early afternoon New York time were trading at $34 for a gain of close to 62%.
A player in the gig economy, Fiverr serves as a marketplace for freelancers who offer services such as copy-editing, logo design, voice-overs, social media management and translations to businesses and individuals.
Founded in 2010 by Israelis CEO Micha Kaufman and Shai Wininger and based in Tel Aviv, Fiverr originally required freelancers to charge a fixed fee of $5 for their work. The company changed the policy four years later to allow freelancers to charge what they want.
Asked if the company is on its way to profitability soon, Kaufman told Yahoo Finance: “Fiverr is a very high growth business and very strong repeat behavior of its cohorts. If you look at our EBITDA [earnings before interest, taxes, depreciation and amortization], you see that the negative EBITDA is shrinking, so we’re balancing growth and on the path the achieving profitability.”
Fiverr has been growing rapidly, but it is losing money. While revenue increased by nearly 45% from $52.1 million in 2017 to $75.5 million last year, net losses widened nearly 90% from $19.3 million in 2017 to $36.1 million in 2018.
In the first quarter of 2019, however, Fiverr posted an $8 million loss, half the figure of a year earlier.
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Fiverr may raise more money, as underwriters have a 30-day option to purchase up to an additional 789,473 shares from Fiverr at the IPO price.