Tuesday, September 10, 2013

Freelancer.com $430 million buy-out likely not enough for Sydney entrepreneur

Matt Barrie, chief executive of Freelancer.com, in his office at Jones Bay Wharf.

Matt Barrie, chief executive of Freelancer.com, in his office at Jones Bay Wharf. Photo: Louie Douvis

Australian outsourcing firm Freelancer.com is close to hitting the jackpot with several companies pursuing its acquisition, one of them with a $US400 million ($430 million) offer.

The firm offering the largest bid is Japanese recruitment site Recruit Co. 

Freelancer chief executive Matt Barrie, 40, is seriously considering offers made over the past few weeks, but he is unlikely to accept any, sources said.

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Know more? bgrubb@fairfaxmedia.com.au

Barrie, who featured prominently in Fairfax Media's Digital Dreamers video series, would not comment on the offers this week, but he told Fairfax Media that close to 100 offers have been made since 2009.

The Sydneysider founded Freelancer in June 2008 at his home and it first ran under the domain name biditout.com. He later bought similar sites, including getafreelancer.com and freelancer.co.uk. Barrie has criticised Australian governments and the education system for failing to support the technology sector while expanding Freelancer globally, winning numerous technology and business awards and now employing hundreds of people.

Instead of selling the business it is understood that Barrie wants to keep growing it and then list it on a stock exchange.

Speaking to Fairfax, Barrie said none of the offers had been made by Australian companies.

"I'll talk to everyone," he said. "It's good to be wanted. It's good to field discussion."

He said he had "thought about listing on the Australian stock market" but had no immediate plans to do so.

"We think about everything obviously," he said. "We certainly have no plans for an IPO. In the future, maybe, if things go really well."

He had thought about listing in Australia rather than the US because he wanted to help build the Australian start-up scene, he said.

"I've had lots of discussions with both strategic and financial players. I'm always happy to talk to people."

Mick Liubinskas, a former manager at the Sydney-based start-up that offered a program allowing free downloads of MP3 files, Kazaa, said he wasn't aware of the acquisition offers, but understood why Barrie could be rejecting them.

"His company has billions of dollars worth of potential," Liubinskas said. "I understand that Matt probably has bigger plans."

Mr Liubinskas, who now runs start-up incubator Pollenizer in Surry Hills, said that like many other entrepreneurs, Barrie wasn't driven by money.

"Entrepreneurs are looking to create something that changes the world. Matt's on his way to doing that," Liubinskas said.

"We all know he's a bold guy and I think he would see himself as on the start-up journey and not at the end of it."

Freelancer, which claims to be the world's largest outsourcing marketplace, allows users to post projects online, which freelancers then bid to carry out. More than 8 million users have signed up with more than 4 million projects posted, the website says. To make money, it takes a cut on all jobs listed.

It has copped its fair share of criticism as some view it as hastening the export of jobs from rich countries to countries with lower wages (and lower bids), which is bad news for Australia's high-skilled, white-collar professionals.

The Recruit Co offer was first reported on Tuesday by US start-up website TechCrunch.

Should Barrie close the $US400 million deal, he would receive $US200 million for his 50 per cent stake.

Australian technology entrepreneur Simon Clausen, who lives in Switzerland and founded PC Tools (which was sold to Symantec for $US262 million), also owns an undisclosed stake in Freelancer. He would also likely receive a substantial sum if any deal went ahead.

twitter This reporter is on Facebook: /bengrubb


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