Upwork (NASDAQ:UPWK), the online freelance marketplace, is inching closer and closer to its IPO. The company recently updated its IPO filings with its primary outlines of structure (shares tendered and cap table), as well as its preliminary view of pricing ranges.
IPOs have been hot in recent weeks, likely due to a lack of new supply. Farfetch (FTCH), the online luxury fashion retailer, for example, was able to both raise its pricing range and price above it; Eventbrite (EB) similarly raised its pricing range and opened for trading at a strong pop. It wouldn't surprise me if Upwork was able to follow the same trend.
As it currently stands, Upwork has positioned its IPO for merely a unicorn valuation of just over $1 billion. This is rather conservative for a company that has raised $169 million from VCs and has garnered plenty of marketing hype, and is due to generate just under $300 million in revenues over the next twelve months.
That being said, there are certainly red flags to watch out for in Upwork's IPO. The company's growth has slowed down to below 30%, which is a psychologically important threshold for many growth investors. The company was able to accelerate revenue growth in the first half of FY18, but only by materially increasing sales and marketing expenses and shouldering heavy losses - indicating a typical semi-desperate push for greater growth leading up to an IPO.
Upwork and sites like it, after all, are not new concepts anymore. There is certainly a concern that the company's addressable market has become saturated. In addition, plenty of other apps have offered easier, sometimes higher-paying sources of "gig" income. When Upwork was a younger company, Uber, Lyft, and Airbnb weren't in the picture - Upwork's predecessor sites, Elance and oDesk, were among the top sources of generating side income. But now with flashy sign-up bonuses and the relative ease of
