More than 100,000 people have been laid off in the tech industry alone this year, and by circumstance or choice, at least some of them will never return to full-time employment. LinkedIn launched its Freelance Marketplace in 2021 to capture some of this activity. Now, as other freelance marketplaces struggle, the Microsoft-owned company is providing its first major update on how things are going.
To date, nearly 10 million people have created a page on the Services Marketplace, a 48% increase over the past year. Service requests that are not actual commercial engagements (not the numbers shared) are also on the rise, averaging eight per minute and an overall increase of 65% year-on-year.
To put these numbers in some context, LinkedIn currently has over 1 billion registered users. This means that the freelance marketplace attracts the attention of just 1% of the user base. And the level of interest on the buyer’s side is not so clear. LinkedIn doesn’t share the number of services sold, nor does it provide details about how much sellers charge or other trends.
Comparing LinkedIn’s performance with its competitors can be tricky. Two large publicly traded peers, Fiverr and Upwork, don’t publicly disclose how many sellers they have on their platforms, instead focusing on the number of buyers, which are about 4 million and 868,000, respectively. (Estimates for freelancers on these platforms range from hundreds of thousands to millions.)
LinkedIn’s premise for the services marketplace was initially to build new businesses and services for users by leveraging the new world of work that emerged as a result of the COVID-19 pandemic.
It was following the tide that lifted the other boat. Shares of Fiverr and Upwork have soared as a new class of knowledge workers choose to work more flexibly. These platforms were also receiving a lot of interest from buyers. Companies were also turning to an “on-demand” model to meet their needs.
But come 2024, freelance marketplaces are retooling their business models after seeing a decline in demand and increasing their “acquisition rates” to maintain profits as more people choose stable employment or simply move away from these platforms. The situation may change as more AI services become established in the future.
However, LinkedIn’s 10 million figure and the fact that this news is available to the public are noteworthy. This shows that the company still sees an opportunity to turn to freelancing, despite the modest profits it has made so far.
The company plans to eventually look at more formal pricing methods, but for now it’s using its freelancing platform to build engagement and drive premium subscriptions.
Those who pay for the premium business tier can increase exposure on their freelancer profiles (also known as service pages on LinkedIn). LinkedIn says premium subscriptions increased 51% this fiscal year, generating $1.7 billion in revenue. But that remains a small part of the bigger picture for a company that earned more than $16 billion in revenue last fiscal year.
