Freelancer.com founder Matt Barrie and his leadership team will maintain almost complete control over the company after IPO, with the firm’s prospectus revealing plans to issue shares for just 6.9 per cent of the company.
The prospectus comes almost a month after Freelancer.com turned down a $400 million deal from Japanese firm Recruit Co. Interestingly; the prospectus values Freelancer.com at $218 million.
The online offshoring platform has quashed predictions that it would be holding the largest Australian tech company IPO in history, announcing that it only intends to raise under $15 million by going public.
As for the public, they will only be entitled to 30 million shares at 50 cents a pop.
Mr Barrie will hold onto the majority (46%) of the company’s shares, a slight dilution of his existing 50% stake. Meanwhile, founding investor Simon Clausen will assume a 38.8% stake in the company and Freelancer.com’s chief technology officer Darren Williams will receive 2.9% stake in the firm.
Rounding off the pie, other existing shareholders will retain a 4.6% slice of company, and current employees will be offered a 1.6% stake.
No immediate returns
In the prospectus, Mr Barrie warned that Freelancer.com will not provide a quick return for investors.
Over the past three years, Freelancer.com has posted strong growth in its gross profits, but has also seen a gradual decline in its earnings before interest, taxes, depreciation and amortization (EBITDA).
“Freelancer has always focused on long-term growth at the expense of short-term profit, and it is expected that this will continue for the foreseeable future,” Mr Barrie said in the prospectus.
“Therefore, the company plans to continue to reinvest strategically to achieve growth, which may result in a period of minimal operating profits.”
“We do not expect to pay dividends in the near future,” he said.
Overseas expansion with an eye on developing countries
In the prospectus, Freelancer.com also clarified that it is looking to use the funds to expand overseas, with the aim of targeting developing countries.
The firm is hanging its hopes on figures from the US census bureau that around 60% of the world’s population are yet to use the internet.
“Almost 4.5 billion people are ready to join the internet. When they do so, they will need a job, as today they live on less than $10 per day,” the company said in its prospectus.
“It is likely that they will use the internet to find work. Freelancer is well positioned for the future as a result.”
Applications for the offer are set to open on October 21, with the company expected to list on the ASX by November 15.