The world's largest digital freelancing platforms, Fiverr and Upwork, face a phase of slowed growth after a rapid rise during the pandemic. While the companies gained significant value during the lockdowns, their stocks are currently trading at less than a fifth of their peak.

In September, Fiverr recorded a revenue increase of 19.2% and delivered 88,321 electric vehicles, while Upwork increased its revenues by 19.2%. However, the overall market for electric vehicles grew by 48% during the same period, causing both platforms to lag behind market growth. Analysts, such as Fiverr CEO Micha Kaufman, point out that after a phase of extreme growth, a slowdown is inevitable: "Looking forward, growth will then be slower.

To counteract declining growth rates, Fiverr and Upwork are increasingly focusing on profitability. Both companies are raising their "take rates," which is the share they earn from each transaction. Fiverr reported a record high of 33% for the three months through June, while Upwork also reached a new peak at 18%. Additionally, both platforms are promoting subscription-based services and premium listings to achieve higher revenues.

Hayden Brown, CEO of Upwork, emphasized at an investor conference: "In this environment, we must continue to purposefully pursue our profitability goals." These measures aim to stabilize revenue, even as the number of services sold declines.

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"In addition to adjusting business models, the platforms also face challenges from increasing competition from traditional recruiters and the return of many employees to the office. Bernie McTernan, an analyst at Needham & Company, commented: 'These companies were focused on growth at any cost during the pandemic. Now, as growth slows down, they are strongly concentrating on increasing margins.'

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Despite the first net profits since their IPOs, the stock prices of Fiverr and Upwork remain in decline. "Investors were so focused on growth during the pandemic that a slowdown now seems shocking," explained Rania Stewart, an analyst at Gartner.