Upwork Expands into Corporate Staffing

Upwork Expands into Enterprise Market with Strategic Acquisitions

Upwork, a leading platform connecting businesses with freelance talent, has announced the acquisition of two companies. These acquisitions are designed to facilitate the creation of a new, independent business unit focused on serving enterprise clients and broadening its market presence.

Acquisition of Bubty and Ascen

The San Francisco-based company revealed its purchase of Bubty, a platform specializing in workforce management. Additionally, a definitive agreement has been reached to acquire Ascen, a global company providing compliance and Employer of Record (EOR) services. This announcement preceded Upwork’s second-quarter earnings call scheduled for August 6.

Integration and Stand-Alone Entity

Upwork intends to integrate Bubty and Ascen into its current enterprise operations. This will result in a distinct, stand-alone business operating under the Upwork brand.

Expanding Talent Access

This strategic move is significant as it enables Upwork to offer access to a wider range of talent beyond its traditional independent contractor network. Essentially, the company is positioning itself to compete within new segments of the corporate staffing industry.

Service Offerings

The new entity will support diverse contract types, including agent of record, employer of record, and staff augmentation services.

Driven by Customer Demand

Upwork President and CEO Hayden Brown explained to TechCrunch that the timing was optimal for launching this enterprise-focused business. Existing enterprise clients had consistently requested access to these expanded talent pools.

Addressing Market Gaps

“Currently, many providers necessitate a trade-off between flexibility and compliance, or speed and scalability, or a digital tool versus a robust enterprise solution,” Brown stated. “We are rejecting this compromise. We are providing our customers with all the benefits they seek, responding to their clear demand for a unified solution.”

Enterprise Revenue Contribution

Brown indicated that Upwork’s existing enterprise business currently generates approximately $100 million of the company’s total $750 million in annual revenue.

Strategic Separation for Focused Growth

The decision to establish the enterprise business as a separate entity stems from the distinct needs of enterprises regarding compliance and software integrations, compared to the small and medium-sized businesses that constitute Upwork’s core customer base.

This separation will facilitate improved external branding and enhanced internal focus, according to Brown.

Rigorous Evaluation Process

Upwork evaluated over 100 potential acquisition targets to build out this new business. Bubty and Ascen were ultimately selected not only for their individual strengths but also for their synergistic capabilities. Upwork conducted pilot programs with both companies independently and in combination.

Synergistic Technology

“Through these pilots, we observed the significant impact of their technology and the ease with which their offerings could be integrated with our existing services, delivering a novel and innovative solution to the market,” Brown added.