Upwork, a platform connecting companies with freelancers, has announced two acquisitions to establish a new enterprise-focused business aimed at expanding its market reach.
The San Francisco-based company has acquired Bubty, a workforce management platform, and signed a definitive agreement to acquire Ascen, a global compliance and employer of record (EOR) company, ahead of its second-quarter earnings call on August 6.
These acquisitions will be integrated into Upwork’s existing enterprise division to create a stand-alone entity under the Upwork brand. This strategic move will enable Upwork to offer access to talent beyond its traditional independent contractor workforce, allowing the company to compete in new areas of the corporate staffing market. The new entity will support various contract types, including agent of record, employer of record, and staff augmentation.
Upwork’s president and CEO, Hayden Brown, stated to TechCrunch that the time was right to launch this new enterprise business, as existing enterprise customers have increasingly sought access to broader talent pools.
“Most providers today force customers to choose between flexibility and compliance, or speed and scale, or between using a digital tool versus a robust enterprise solution,” Brown explained. “With this new capability, we’re refusing to compromise. We’re delivering all the benefits our customers have been looking for, and we’ve heard clearly that they want a singular solution.”
Brown noted that Upwork’s existing enterprise business contributes about $100 million to the company’s overall $750 million annual revenue.
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The decision to create a stand-alone entity for the enterprise business stems from the distinct needs of large enterprises regarding compliance and software integrations compared to the small and midsize businesses Upwork typically serves. This separation allows for better branding and a sharper internal focus, according to Brown.
Upwork evaluated over 100 potential acquisition targets to develop this enterprise business, ultimately selecting Bubty and Ascen for their complementary strengths. The company piloted both companies individually and in tandem, discovering how effectively their technologies could integrate with Upwork’s existing offerings.
Details regarding the branding and full offerings of the new stand-alone business are expected to be revealed later this year.
SOURCE: TECH CRUNCH
