Fiverr’s Q2 2024 report landed just one week after the company told the world it was more hiring platform than freelance marketplace. Say what? It’s been another challenging quarter for Fiverr’s users, but Fiverr is sticking to its guns as it focuses on survival in the age of AI.
Fiverr’s Q2 2024 report is finally here, and it confirms the suspicions of many sellers: that the platform is losing buyers. But that’s not the only story of this quarter. This quarter was one of building something new, a process that is likely to be reflected through the rest of 2024 into 2025 and beyond.
As a seller, it’s always a good idea to explore what Fiverr’s quarterly financial reports, since they can tell us what the company is planning. It can also give us insight into where the company is going, as well as give some more concrete numbers for questions like but where have all the buyers gone?
The Q2 2023 did not come as a surprise to me, and mostly confirmed suspicions that I had. I’m a Pro-Verified TRS who started working on Fiverr in 2013 and I have enjoyed a long and successful career on the platform. However, lately, like many others, my views have become more critical in response to Fiverr’s unwillingness to listen to its users.
This article follows on from my previous articles about Q1 2024, Q4 2023, and Q3 2023. The aim of this series is to look at the key trends and strategic pivots of Fiverr over time and investigate how they affect sellers (and to a lesser extent, buyers).
While this article won’t cover the financial results in depth, let’s start by taking a quick look at the numbers that sellers care about.
Fiverr’s Q2 2024 Results Are Overall Positive
- Revenue Growth: Revenue was $94.7m, indicating a YoY growth of 6%. However, there is a light decline from the growth of Q1 2024, where the revenue growth was 6.3%
- Active Buyers: Fiverr now has 3.9 active buyers, down another 100,000 from Q1. Fiverr lost 200,000 buyers across 2023, suggesting that this trend is acceleration.
- Spend Per Buyer: Buyer per spend increased to $290, representing a YoY increase of 10% – this figure does help to offset the number of buyers leaving Fiverr
- Take Rate: Fiverr’s take rate continues to rise, now standing at 33.0% from 32.3% in Q1. Fiverr’s attempts to monetize sellers are clearly working, despite seller complaints
What does all this mean? Fiverr started to focus on marketing to higher-quality, higher-spending buyers in Q3 2023, which may explain part of the buyer decline as well as increased spending.
It’s not just buyers who have been splurging, either.
Financially, Fiverr is in good health; it had to be, in order to afford the $100M share buyback that pulled its stock out of the doldrums of the February 2024 drop. Described as “gimmicky” by the Motley Fool, the buyback partially came about as a result of Fiverr’s disastrous Winter Product Release, which saw two millionaires publicly leave the platform in disgust, prompting the company to issue YouTube-style “millionaire” plaques in a blitz of publicity.
However, there are dark clouds on the horizon for Fiverr in the shape of artificial intelligence.
Fiverr Is Still Committed to AI
Despite many of the freelance marketplace’s users having reservations about AI, whether as buyer or seller, Fiverr remains committed to the technology across the marketplace. Fiverr’s 2024 Summer Product Release was packed with AI features, including the promise of a new, improved version of Neo.
How is Neo improve? Why, via Fiverr Answers (not yet released), of course. Taking obvious inspiration from Quora, Fiverr Answers will invite select expert sellers to answer AI-generated questions. While sellers may benefit from a marketing boost on this program, it’s hard to shake off the feeling that Fiverr is using its sellers as a free training resource for one of the worst chatbot assistants on the internet today.
It’s just another example of how Fiverr’s focus on AI often leaves the needs of sellers as an afterthought to the needs of its AI. Even buyers’ needs are overlooked, thanks to a dubious AI policy that doesn’t penalize deceptive AI sellers.
While Fiverr may prefer to point to issues such as the cost of living crisis and the conflict between Israel and Palestine as potential negative explanations for declining buyer numbers, the company must realize that buyers do not want to pay sellers for something that they can do themselves.
This is not a Fiver-specific issue, since the advance of AI means that many of today’s more complex jobs will soon fall. Fiverr’s apparent obsession with AI technology may not be that of a fanboy, but more of a company that is trying to face down an existential crisis by becoming a part of the future of work.
Fiverr Acquires AutoDS
The Q2 2024 report from Fiverr also came with the announcement of the platform’s acquisition of AutoDS, an Israeli end-to-end dropshipping platform that helps entrepreneurs to scale their ecommerce stores more efficiently.
This also means Fiverr has a new wealth of tech goodies to integrate into its marketplace in future. Some key features that the platform’s uses may see in the near future include:
- A research system to find profitable products and compare prices
- Bulk importing of products to a store in one click
- Automated ecommerce order processing, inventory management, and fulfilment
- Print-on-Demand services
- Social media selling
- An AIWrite tool designed to optimize product listings
Speaking on the acquisition, Kaufman said:
AutoDS has built an impressive product and community that is highly synergetic with Fiverr. Dropshipping and its adjacent services in marketing and programming verticals are some of the fastest growing categories on Fiverr. It is also a community that is deeply rooted in Fiverr’s origin, where anyone with talent and idea can leverage FIverr’s platform to build a business. This acquisition also marks another step in Fiverr’s transformation from a marketplace into a powerful platform that offers not only access to talent but also software solutions for its audience, making it a one-stop shop for their entire digital needs.
CEO Micha Kaufman, Yahoo! Finance
This move may help to fix Fiverr’s free-falling active buyer base. For now, though, this acquisition could be a net positive for sellers who serve the ecommerce sector, as it may bring more AutoDS users to the platform seeking expert talent to help with the many moving parts of their day-to-day business.
As a side-note, there are just 198 AutoDS services available on the platform today, so this may be a niche worth researching – it’s certainly a lot less competitive than many others today!
The AutoDS Acquisition Points at Part of Fiverr’s Futureproofing
While Fiverr staff do not enjoy being reminded that the platform has lost 400,000 buyers since the beginning of 2023, it’s still a fact, and one that is deeply concerning to the platform’s sellers. Many have noticed a decline in sales, but it gets worse: the trend is accelerating, with 200,000 of those buyers becoming dormant in 2024.
Many sellers – including myself – point to Fiverr’s fixation with AI as the root cause of this issue. It isn’t just sellers frustrated with dwindling earnings and increasingly broken AI algorithms: investors have also noticed, too. In an article from April, Investor Place highlighted Fiverr stock as one to sell before “crashing and burning”, citing:
- Growth has declined from 50%+ annually during the pandemic years
- AI threatens the company’s core business: the freelance marketplace
Simply put, AI is the worst it will ever be today. In the coming years, basic tasks will not require freelancers. Fiverr’s approach to this has been to focus on “complex” AI services, where AI tools augment human work.
To date, Fiverr has prioritized using AI for back-office roles and tools like Fiverr Neo, whose utility is debatable. Might it now be looking at AI and automation tools that help sellers to work faster and better? We already see this with its encouragement for non-native English speaking sellers to use ChatGPT for communications, but integrated tools could be a lot more effective in many different ways. It would also add some much-needed punch to the company’s lackluster Seller Plus offering.
However, even this approach is not futureproof; it is inevitable that as the AI industry matures, its products will become even easier to use, making even domain expertise in many services negligible.
So what’s the answer to that?
Well, I can only make an educated guess, but there was an interesting press release that went out alongside the recent Summer Product Release. Together with AutoDS, we can get an idea of what Fiverr might be planning for 2025 and beyond.
Fiverr: From Freelance Marketplace to Hiring Platform
I certainly missed this in the Summer Product Release announcement, because Fiverr simply didn’t mention it to sellers. They also locked down all and any discussion of its latest changes on the Forum, perhaps due to the fact that the winter product release of the year caused several months of upset and criticism on the forum.
So much for the much-vaunted “transparency” the company announced for its sellers back in February. But it’s true; Fiverr now considers itself to be a hiring platform rather than a freelance services marketplace. It may take the rest of the world some time to catch up on this distinction.
But now Fiverr has made it official, it’s possible to trace a line through previous changes to the platform. This isn’t a spur-of-the-moment thing, but rather something that has been planned by leadership for at least the past two years.
This was already on the horizon with Fiverr Enterprise (formerly Fiverr Business) catalog, which enables large companies to hire freelancers without the headache of hiring freelancers. This is a closed marketplace that uses the Stoke Talent platform, which Fiverr acquired back in November 2021. Stoke Talent was a freelance management platform.
On a similar note, Fiverr Certified can be seen as a way for large corporations to outsource their customer service.
Will we see a new marketplace in the near future inspired by AutoDS? I’d say it’s a possibility. This year has already seen the introduction of Professions, a skills-based catalog that’s essentially a clone of Upwork’s specialist profiles.
Combine this with new features like hourly pay and success managers for buyers who will go out and find talent, Fiverr is building its hiring platform slowly but surely, separating the talent from the clients. This is one way to reduce friction while increasing revenue, but it leaves me with one question.
What about new sellers or low-level sellers who, for whatever reasons, don’t perform well? In the long term, is there a place for them on Fiverr? The company is already losing “cheap buyers,” which means that inexpensive sellers are indirectly being squeezed out.
But Fiverr may have a plan for that.
Might Kickstart Be “Pay to Play”?
The Summer Product Release also introduced Kickstart. There still isn’t a lot of information about this feature, but Fiverr promises it will help new freelancers on the platform to, kickstart their career (duh). This may be related to the freelance training program Fiverr announced some time ago that still hasn’t gone anywhere.
This becomes a more interesting program when you realize that Fiverr is moving away from freelancing into what it presumably thinks is a more AI-proof world of hiring and talent management.
This is just speculation on my part, but I believe Kickstart may be all but mandatory for new sellers who wish to join. Currently, the seller approval process is very opaque, with no reason given for rejection. Failing to complete kickstart, on the other hand, presents an easy-to-understand reason. And within this aegis, certain minimum standards can be maintained that help Fiverr to build its hiring platform.
If my hunch about using the existing training program turns out to have some truth to it, then Kickstart could be a good source of revenue for the sellers who are signed-up trainers.
What Does Fiverr Want to Be When It Grows Up?
The first point to make about Fiverr’s bold new direction is that freelancers are not temporary workers.
Legally, freelancers are contract workers.
Fiverr’s hiring platform vision takes it into, or at least very close to, the world of employment rights. Fiverr is stepping into a gray area here, and while some sellers might welcome the change, many might not. For me, there is not enough information to make a call either way, other than to point out that the implications of the “future of work” sit better with corporate leaders rather than their underlings.
It’s something that I believe the community should discuss, but at this moment in time, the Fiverr Forum is, unfortunately, shutting down any discussion that it views as too critical of its current actions around AI and its future.
It’s not a good look. And it’s a shame, because it only serves to increase the antagonism of many of its best sellers and top talent. Do we not have a say in anything? It’s frustrating and demoralizing. The fact that Fiverr’s response to millionaire talent abandoning ship was a cheap plaque speaks volumes, and not necessarily in the way that Fiverr wants it to.
However, Fiverr is racing against the ever-increasing capabilities of AI, and maybe staff feel that they can’t fully explain everything yet, nor can it be understood until the plan is finished. This is a core shift at the center of their business model, after all – and one that curiously, nobody cared to highlight to sellers.
Whatever Fiverr has planned will be ambitious, but staff and leadership should remember that people originally came to Fiverr because it was cheap and cheerful, yet you could access great talent. Today’s company seems to have lost sight of that as it tries to dodge the AI curveball, but it cannot ignore the increasing frustrations of its community.
Today, many sellers are starved of buyers, exhausted by a brutal success score system, and frustrated by Fiverr’s inability to listen. Buyers are tired of getting AI work from sellers who promised human work, and the prices are no longer as tempting as they once were.
Sure, you can say it’s a part of Fiverr’s masterplan. But is it really? Can any company afford to treat its workforce this badly, even if it the non-existent regulatory landscape on freelance worker rights means that it doesn’t need to?
Small and Medium Businesses Are a Weak Spot for Fiverr
Small and Medium Size Businesses (SMB) have been the bread and butter of many Fiverr sellers for years, yet the investor report notes that this continues to be an area of weakness. Fiverr points to the economy as the reason to this, but it in my opinion, its poor AI policy and the conflict between Israel and Palestine also contribute to this, although Fiverr did not share any data about this.
Instead, Fiverr pointed to AI – of course – as being a net positive for the company, offsetting the decline in “simple services”. The company believes that providing access to AI talent and services on its “trusted marketplace” will help it to capitalize on massive global economy, but let’s get real here, Fiverr. The platform’s current AI policy allows for widespread deception that is turning buyers off.
Until Fiverr fixes this, it’s hard to see how they can throw terms like “trusted marketplace” and “AI” about seriously as a net positive. In the long term, this can only damage Fiverr’s reputation, even if it does bring in short-term profits. SMBs should be one of the core target markets of Fiverr, but these business have little reason to pay for AI results they can generate themselves.
Sellers have been trying to tell Fiverr this for months, but it all falls on deaf ears.
The Road Ahead for Fiverr And Its Users
As I wrap up this analysis of Fiverr’s Q2 2024 report and actions, the mixed signals are hard to ignore. One one hand, Fiverr’s strategic pivots to AI integration and upmarket services paint a picture of a company marching aggressively towards a technologically advanced and diversified future. On the other hand, the shrinking active buyer based and ongoing seller dissatisfaction reveal a turbulence that the company would rather ignore.
The question for every seller on Fiverr is one of survival. If not to get orders, then to maintain scores on a byzantine success score that nobody really seems to understand. Every time Fiverr fortifies its technical arsenal, it seems to come at a personal and professional cost to sellers. If it’s not AI-driven displacement or the increase commodification of simpler tasks, ground realities are shifting.
Now, this is true everywhere, and not just Fiverr. It’s certainly possible to view Fiverr’s transformation into a hiring platform as a strategic evolution, but for many users, it feels like Fiverr is drifting away from the very principles that once made the platform a revolutionary space for freelance talent. As the platform’s focus narrows to cater to higher-end clients and more complex AI-driven services, many sellers are finding themselves at a crossroads.
For those of us invested in Fiverr’s ecosystem, whether as veteran sellers or newcomers trying to carve out a niche, the future is one is unclear. The imperative to continually upskill, adapt, and anticipate market needs is clearer than ever. Fiverr needs to match these demands with transparent policies, genuine engagement with seller concerns, and tools that enhance rather than complicate the selling experience.
The marketplace is only as strong as the trust and satisfaction of its users. Will Fiverr heed the call of its community? Only time will tell. But until then, sellers will be watching, waiting, and, most importantly, voicing their opinions every step of the way – The question for every seller on Fiverr now is not just about adapting to these changes but about survival in an evolving digital marketplace. While Fiverr fortifies its technological arsenal, the personal and professional costs to sellers continue to mount. From AI-driven displacements to the increased commoditization of simpler tasks, the ground realities are shifting.
Fiverr’s drive towards becoming a comprehensive hiring platform might seem like a strategic evolution, but for many sellers, it feels like a drift away from the very principles that once made the platform a revolutionary space for freelance talent. As the platform’s focus narrows to cater to higher-end clients and more complex AI-driven services, many sellers are finding themselves at a crossroads.
For those of us invested in Fiverr’s ecosystem—whether as veteran sellers or newcomers trying to carve out a niche—the future is one of cautious navigation. The imperative to continually upskill, adapt, and anticipate market needs is clearer than ever. Yet, the support from Fiverr must match these demands—through transparent policies, genuine engagement with seller concerns, and tools that enhance rather than complicate the selling experience.
As we look towards Q3 and beyond, the challenge for Fiverr is not just to advance technologically but to ensure that its growth does not come at the expense of its vibrant community of sellers. After all, a marketplace is only as strong as the trust and satisfaction of its users—both buyers and sellers. Will Fiverr heed the call before it’s too late? Only time will tell, but rest assured, the sellers will be watching, waiting, and, most importantly, voicing their opinions every step of the way – whether Fiverr wants to listen or not.
