March 26 (Bloomberg) -- Freelancer Ltd. is expanding in Europe after revenue at the online service that provides technology workers climbed 77 percent last year and its shares tripled in value since November.
Freelancer, whose website allows people to post jobs ranging from Web design to application development and then compare bidders and prices, opened a European headquarters in London this month and made an acquisition in Poland. The Sydney-based company has about 10.5 million users on Freelancer.com.
London generates more revenue for Freelancer than any other city, Chief Executive Officer Matt Barrie said in an interview last week in the U.K. capital. “It’s a high-growth area” and the company has moved its head of international operations from Australia to be based permanently in the city, Barrie said.
More than $1.4 billion of projects have been posted online since 2001 with Freelancer and companies it has acquired. Competitors include Mountain View, California-based Elance Inc., which announced a merger with oDesk Corp. in December to create a service with a global base of 8 million freelancers and 2 million businesses. Supplying contractors and temporary workers is a $300 billion a year industry worldwide, according to consultant Accenture.
“Connecting fragmented buyers and sellers through its portal places Freelancer in a very powerful position that will ultimately lead to significant earnings growth,” Owen Humphries, an analyst at Canaccord Genuity in Sydney who has a buy recommendation on the stock, wrote in a note last month.
Freelancer first sold shares on the Australian Securities Exchange in November with an initial price of A$0.50. Since then the stock has more than tripled, giving the company a market value exceeding A$720 million ($664 million).
Nick Barton, who co-founded Ipswich, England-based Londonmotorhomes.com with his wife last year, used Freelancer.com to pick a website designer in Canada. Barton’s company, which hires out luxury motor homes, had quotes of 3,300 pounds ($5,450) to 6,000 pounds for the work from local firms. Barton paid $1,500 for the job through Freelancer.
“It enabled me to outsource a complex online-payment Web design project for about half the cost I would pay a local firm,” he said in an interview.
About 80 percent of jobs posted on Freelancer are in the information-technology industry. To diversify and become more global, Freelancer has bought 11 companies since its creation in 2009. This month, it purchased a Polish freelancing marketplace for a dollar sum in the “low six digits,” Barrie said.
Freelancer’s revenue rose to A$18.8 million last year from A$10.6 million. “We’re not providing guidance for 2014 just because the company is growing so fast,” CEO Barrie said.
The company also plans to roll out an application for Google Inc.’s Android mobile operating system in the first half of the year, with an offering for Apple Inc.’s iOS system to follow, the CEO said. “We have been a bit late but we’ve had other priorities.”
Andrew S. Zamfotis, an analyst at EvaDimensions LLC in New York, questioned whether Freelancer will increase profit at a rate that justifies its valuation.
“Granted, the company is still early and may be just starting to scale, but we need more evidence that it can keep the current sales growth without having to overinvest to get it,” said Zamfotis, who has an underweight recommendation on the stock.
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