Upwork, a platform that connects companies with freelancers, announced two acquisitions to help build out a new, standalone enterprise-focused business that could expand its market reach.
The San Francisco-based company announced it has acquired Bubty, a workforce management platform, and has signed a definitive agreement to acquire Ascen, a global compliance and employer of record company, ahead of its second-quarter earnings call on August 6.
Upwork will integrate these two companies into its existing enterprise business to create a standalone entity under the Upwork umbrella.
The move is significant because it will allow Upwork to offer access to talent beyond the independent contractor workforce Upwork is known for — essentially enabling the company to compete in new areas of the corporate staffing market. The new entity will support contract types including: agent of record, employer of record, and staff augmentation.
Upwork President and CEO Hayden Brown told News that the timing was right to launch this new enterprise-focused business because Upwork’s existing enterprise customers have been increasingly asking for access to these talent pools.
“Most of the providers that exist today force their customers to choose between flexibility and compliance, or speed and scale, or having a digital tool versus having something that’s actually robust and for the enterprise,” Brown said. “And with this new capability, we’re refusing to compromise. We’re giving our customers all of the benefits they’ve been looking for, and we’ve heard loud and clear that they want this singular solution.”
Brown said that Upwork’s existing enterprise business makes up about $100 million of the company’s overall $750 million in yearly revenue.
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Upwork decided to make the enterprise business a standalone entity because enterprises have very different needs regarding compliance and software integrations than the small and mid-size businesses Upwork’s main business works with.
Keeping them separate allows for better external branding and better internal focus, Brown said.
Upwork vetted more than 100 potential companies to acquire to build out this business, Brown said. The company landed on Bubty and Ascen not only for what they bring separately but also for how they worked together — Upwork piloted the companies both individually and together.
“We saw through the power of those pilots how impactful their technology was and how easy it was to basically snap together what each of them offers, along with our existing offering to deliver something very new and innovative in the market,” Brown added.
Details on the branding and full offerings of the new standalone business are set to be unveiled later this year.
