Freelancer.com Acquires Payment Service Provider Escrow.com For $7.5M – TechCrunch
Job market Freelancer.com announced today that it has agreed to buy Escrow.com for $ 7.5 million in cash. The acquisition was funded through a placement of A $ 10 million (approximately $ 7.8 million) in Freelancer.com common stock with institutional investors.
As the name suggests, Escrow.com provides online escrow services for ecommerce websites by withholding payments for goods or services until a transaction has been successfully completed. Commercial partners include eBay, GoDaddy, AutoTrader.com, and Flippa.com. Escrow.com was founded by Fidelity National Financial in 1999 and merged with iLumin in 2002 before being bought by an unnamed private investor in 2004. Freelancer.com announced that it will acquire Escrow.com from the same investor.
In a prepared statement, Freelancer.com CEO Matt Barrie said the acquisition will enable Freelancer.com’s 15 million users to make safer payments. He added that “it is a strong cornerstone for entry into the payment room.”
Freelancer.com already has a version of escrow services called Milestone Payments. This means that the website will hold funds from an employer until they are released to a freelancer upon completion of a service or dispute resolution. Holding payments is intended to give employers some level of reassurance, especially after the site’s rapid growth through a series of acquisitions starting in 2011 and being listed on the Australian Stock Exchange in 2013.
However, the Milestone Payments system is the frequent target of complaints from both employers and freelancers who claim that payments are not made on time and the system does not provide adequate protection against poor jobs. The Escrow.com acquisition can help Freelancer.com resolve some of these issues.
Escrow.com claims that its fiscal 2014 gross payment was $ 265 million and that it has processed over $ 2.2 billion in transactions to date.
Photo by PicJumbo