Freelancer Limited (ASX:FLN), owner of the largest freelancing market place freelancer.com, has announced the successful completion of the acquisition of Escrow.com. Escrow focuses on secure online payments with over US$2.7bn in secured transactions.
Freelancer Acquires Escrow.com
Freelancer announced the acquisition of Escrow in April 2015 for a total consideration of US$7.5m. Escrow is a partner of major brands such as ebay, FedEx, GoDaddy or Cars.Com. The strategic acquisition of payment service provider Escrow.com enables Freelancer to have its “own” payment service provider, similar to various other brands such as Amazon or Alibaba.
Escrow.com Business Overview
Chief Executive Officer Matt Barrie presented the Escrow.com business and emphasised on the synergies that will arise for Freelancer’s core offerings. He states that the “opportunity in global non-cash payments is large” as non-cash payment transactions continue to experience strong year-on-year growth. In 2013 the number of non-cash transactions increased by 7.6% to 357.9 billion according to the World Payments Report 2015.
In FY14 Escrow.com posted net revenue of US$5m and EBITDA of US$1.2m while gross payment volume totalled US$320m. Over the five years between 2009 and 2014 revenue rose at an average rate of 13.5% while gross payment volumes increased at 17.8% per annum. The company experiences also high user growth which is set to reach one million users. More than 60% of the users are based in the US with the remaining users spread across other western markets.
Following the acquisition, Escrow.com will continue to run as a stand-alone business as Freelancer aims to aggressively reinvest for growth. Freelancers notes that Escrow caters for both “small” as well as “large” transactions due to its secure payment process. The secure 5-step payment process protects both buyers and sellers as Escrow acts as a middleman who only releases the payment once delivery has been verified.
FLN Up Nearly 170% YTD
FLN opened slightly higher this morning and was last traded at $1.71 at 10:30am (AEDT). FLN is up nearly 170% year-to-date and was recommended by Wise-owl earlier this year. We continue to hold this position in our ‘Growth Portfolio’ as we remain attracted to Freelancer’s growth trajectory, overseas revenue streams and growth potential.
If you have any questions in regards to FLN, please get in touch with the analysts at wise-owl.com.
Also Read: Freelancer Delivers Record Quarter with Positive Operating Cashflow YTD
Author: Simon Herrmann
Dec 01, 2015
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.