Freelancer – executive interview

In this interview, Dylan Carter, CFO of Freelancer, discusses the group’s three main businesses: Freelancer, Loadshift and Escrow.com. In the core Freelancer platform, management is addressing SEO disruption, payment acceptance issues and the impact of enhanced security measures, with improvements expected to support conversion and revenue over time. Loadshift continues to grow transaction volumes in Australia, with the longer-term opportunity centred on replicating the freight marketplace model internationally. Escrow.com delivered strong volume growth, supported by established digital asset activity and expansion into B2B wholesale electronics, with further verticals offering potential for cross-border growth. Dylan also highlights AI as both an internal productivity driver and a growing source of marketplace demand, with AI-related projects increasing their share of Freelancer gross marketplace volume (GMV). Near-term priorities include improving core platform performance while continuing to invest in the international and vertical expansion of Escrow.com and Loadshift.

What attracted you to Freelancer and what experience do you bring to the role?

Dylan Carter: I’ve had a career spread across capital management and FP&A-type roles, very much helping businesses connect their commercial finance to their market proposition. I started my career in treasury, so I’ve always been very interested in how financial markets move, working with investor relations and understanding what drives the value of shares.

I was tempted by Freelancer for two real reasons. Before this, I was working at a payments business, and I had heard of escrow before, so I understood the need for an escrow business in the world and Escrow.com is quite a leader in that space. So, I connected quite well with that.

The second was the Freelancer business. Outside work, I have a bit of an affinity with freelancers because I love to build things; I love to programme and create websites, so I very much understood the Freelancer customer. So, off the bat, I understood the business really well.

I connected with Matt, and he’s quite an inspiring leader. When you talk to Matt, you really understand how technology gets built from the ground up and how a business like this, that has gone from zero revenue to $50m of revenue, is really quite a feat.

For me personally, joining Matt, seeing the inspiration he creates in the team and the products we deliver for our customers, and then, personally, understanding my background and how I can translate that to really drive shareholder value going forward, that’s what really inspired me to join.

How do Freelancer’s three businesses operate and how does the group make money from them?

Dylan Carter: I’m really glad you asked about the three businesses. Everyone I speak to says, ‘I know about Freelancer’, but they don’t realise that we actually have three different businesses in the group.

The Freelancer core marketplace represents about 70% of our revenue. It’s effectively connecting freelancers with businesses around the world to get everything done from design and manufacturing all the way up to complicated biochemical engineering and other very complicated scientific experiments that go on in the platform. We really are a marketplace that enables pretty much anything to get done in one space.

We earn revenue effectively by taking a ticket on every transaction that goes through. So as there is more activity on the platform, we earn a percentage of that. In total, it is about 30%: we get a clip, partly a take rate and partly from other services that we offer on the platform.

The second business is Escrow.com. Escrow is a payments and transaction provider for high-value transactions. We specialise particularly in digital assets such as domain names and IPv4s. Like a traditional escrow provider, we take custody of the funds, but we also take custody of a lot of the digital assets, and that is our competitive difference.

When both parties are happy with the transaction, we release the funds or asset to the opposing party and earn a percentage management fee for that. It is really about situations where there may not be trust between two counterparties. We become that impartial third party that enables the trusted transaction to go through.

Our third business, which is our smallest but growing rapidly, is our Loadshift business. It is a freight marketplace, very much an application of what Freelancer was but specific to one particular niche. If you imagine trucks going around Australia, there is extra capacity in those trucks that needs to be filled or they may otherwise be travelling empty. We run a marketplace that enables carriers and shippers to use that space efficiently.

So, three different businesses, but across all three it is very much about activity. The more activity that takes place between different parties transacting together, the more fees we earn. It allows us to be very connected to our customers. If we can help them do more business, we in turn get a percentage share of that.

What affected the core Freelancer marketplace in H1, and how are you addressing those issues?

Dylan Carter: Overall activity increased by about 30% in terms of gross marketplace volume, but our revenue declined 12%. That reflects some of the differences in our business model. Freelancer and Loadshift have much higher take rates, whereas Escrow.com takes a lower percentage of transaction value. The escrow business did very well, and we’ve been exploring tapping into certain verticals and how we drive growth, and I’ll talk about that later.

For the Freelancer business, there were three core challenges that affected performance, and they were very much own goals. We knew we had a few challenges, we implemented some solutions, and, unfortunately, they do have some side effects.

The first was around SEO . At the start of the period, we noticed a significant increase in AI agents trying to scrape our site. As a consequence, we implemented some technical fixes to rate-limit some traffic. Unfortunately, Freelancer is one of the biggest sites on the internet, and we started to rate-limit a lot of traffic that might have been coming from Google because it shared similar IPs, and our SEO performance therefore fell back.

We’ve had a specialist working with us for the past few months, optimising a lot of the SEO performance, and we are starting to see some recovery in performance there, which would be fantastic to see over the coming year.

The second factor was two-factor authentication. Similar to the AI scrapers, we noticed there was more unauthenticated access coming to the platform. We decided it was the right decision to introduce two-factor authentication to improve the integrity of the platform.

If you are a legitimate user, you need to use your email address and confirm that you are the right person entering. Unfortunately, that meant a large number of legitimate users were unable to access the site because they may have lost access to an email account they used three or four years ago, despite having continued to use the platform since then. That meant we had some churn.

With that said, we thought it was absolutely the right move. It increases the integrity of the platform going forward and ensures that our customers feel safer transacting on it.

The third big challenge was around payment acceptance. We merged a number of our merchant IDs on our payment gateways. As a consequence, there were a number of recurring customers whose payments weren’t able to recur on the platform, so payment acceptance rates dropped.

The positive thing to come out of that is that we realised that, throughout the life of the business, our payment acceptance rates have actually been far below optimal performance. We have therefore been looking at where traffic should be going. If a payment is received from a certain jurisdiction, it should go through a particular gateway that has high performance in that jurisdiction, and local acquiring supports that.

As we start routing traffic into the right gateways – and we’ve already started that process – we are beginning to see acceptance rates increase. If only three out of every 10 customers that come to the site are able to pay, that is a very hard business to run. Whereas if we can get seven or eight out of every 10 customers that come to our site able to pay, you get that inherent performance uplift.

We’re working very hard on all three areas. We’ve identified the challenges, we know the solutions, and we are seeing them translate into more positive performance going forward.

How has Loadshift developed since its acquisition, and what are your ambitions for the business?

Dylan Carter: We acquired Loadshift in 2021. We had already started building a solution ourselves and then acquired an existing player to bring those solutions together.

We’ve got pretty much every carrier across Australia on the platform, which is fantastic, and we’ve been growing the volume going through the platform since then. Over the past half, GMV, or gross marketplace volume, was up about 10% to around A$15m.

It is a small part of the business, so the expansion strategy is not just about driving growth in Australia but really is about replicating that model around the world. We’ve identified a number of countries that we want to take the platform to, and that could enable us to grow volumes quite materially.

It’s a really interesting business; it solves a pain point in an industry that is very fragmented. Everything goes via the phone. There isn’t really a centralised platform, or there aren’t many other than us. We help those customers connect and get loads delivered more efficiently and at better prices.

I’m very passionate about that business. It has started to develop over the past few years, and I think it is now at the point where we are really ready to start scaling it.

What has driven the recent growth in Escrow.com, and where do you see future opportunities?

Dylan Carter: Escrow.com had a fantastic first half. Historically, the business has focused very much on domain names and digital assets such as IPv4s.

About six to 12 months ago, we saw an opportunity to move more into the physical space, particularly B2B wholesale electronics. We had a number of conversations that highlighted a similar problem where there was a lack of trust: there were a lot of high-value transactions going on but not a lot of trust between the parties.

Our ability to step in and be the escrow provider for those transactions had a natural market fit. As a result, over the past half our GMV was up about 39% in Australian dollar terms. In US dollar terms, where the majority of those transactions were, it increased almost 60% y-o-y.

A large chunk of that reflected continued growth in our domain name volumes, but also the addition of the new B2B electronics vertical.

This is a business that we’ve spent a lot of years growing. It is regulated in a whole range of different jurisdictions and requires a lot of work to maintain those licences. That creates a significant barrier to entry for any competitor wanting to set up and compete in the area.

Having those licences, including a full US footprint as well as Canada, the UK and Australia, means we are able to undertake those cross-border transactions and tackle new verticals that we haven’t addressed in the past.

Our focus going forward is to identify where there is a trust disconnect in different verticals and how we can provide a tailored, integrated solution for those verticals to drive volume.

How does transaction size affect Escrow.com’s take rate?

Dylan Carter: When the transaction size gets larger, as you would expect, we charge a smaller fee.

In H125, our take rate was about 1.6%. In the most recent half, it was about 1.35%. Part of the reason for that is exactly that: we had a few larger transactions during the half and that brought down our average take rate.

What that does show is that the product is working as expected. Really high-value transactions are able to go through our platform, and there is a lot of confidence in using us as that third party for those transactions.

We are tackling different verticals and each vertical has a different expected take rate. As we take on new verticals, we’ll give the market more guidance around what that will mean for our take rate.

What opportunities and threats does AI create for Freelancer?

Dylan Carter: I think there are definitely both. In terms of the opportunities, both internally and for our freelancers, we’ve seen a significant increase in productivity.

Internally, we’ve built our own AI engineer. Nearly 100% of tier-one support goes through an AI agent first and is then escalated to a human where necessary. That has freed up a lot of time internally.

Our AI agent has also increased productivity, in terms of what gets submitted to the website and goes into production, by about 40%, so there has been a really significant improvement there. We are now starting to roll out AI-agency models throughout the company, and we see a lot of value internally.

Our freelancers on the platform have also become much more productive. A freelancer who may have been able to do a few simple things in the past can now help businesses do much more. There is still very much a need for freelancers to support and work in partnership with different AI solutions.

Interestingly, we looked at the composition of projects and activity on the platform and compared it with last year, and we haven’t yet seen any noticeable drop in core areas.

You might think, for example, that data entry would be something that drops off the platform because AI can do it quite well today. But where there may have been changes, we’ve seen new opportunities grow off the back of AI.

Language models need a lot of humans to effectively type in exactly what something means and do that matching, and that has become a whole new growth area.

If you look at the first two quarters of this year, AI-related work represented about 7.4% of our GMV in the second quarter, compared with 5% in the first quarter.

Overall, we see AI as a huge growth opportunity. We are increasingly investing in how we can be the platform where, if any business in the world wants to get something built with AI, develop an agent for the company or anything else, the technical talent we have on our platform is perfectly suited to support them.

What are Freelancer’s key priorities for the remainder of the year and longer term?

Dylan Carter: It is very specific to each business.

Within the core Freelancer marketplace, we want to make sure that our SEO and payment gateway performance improves. We think our security protocols and two-factor authentication are now at a good, steady state, so we think we’ve solved what we needed to solve there.

Our focus will turn to SEO performance and payment gateways, which should drive top-line growth and conversion. That will take some time, and we are still progressively working through it. So that is our primary focus for this year.

For Escrow.com and Loadshift, it is really about expansion. They are very good businesses, and when you’ve got a business going through a bit of change, you don’t want to take pedal off or the fuel out of the companies that are doing really well.

For both Escrow.com and Loadshift, we are investing heavily in identifying the new verticals we want to pursue and putting the foundations in place so that, when we are ready, we can replicate those businesses around the world in a similar way to what we originally did with Freelancer.

Within the Freelancer business, we also see a number of core verticals as part of our growth strategy. We are making our acquisition strategy much more targeted.

Very specific vertical landing pages have gone up on our site. AI development is one area where we see rapid growth and significant investment by companies, and we want to be the go-to place for that work to get done.

Other areas include cosplay, which we see as a very large use case and one that is very AI-defensive on our platform. We have an acquisition strategy around that vertical as well.

Our focus for the coming period is really on how we drive that top-line growth while making sure we continue to support our other core businesses.

This transcript has been lightly edited for clarity and readability. Verbal fillers, false starts and minor repetitions have been removed from the interviewee’s responses only. Punctuation, spelling and formatting have also been standardised in line with Edison house style. No substantive changes have been made to the meaning of the discussion.