Upwork Ventures into Corporate Staffing, Expanding Beyond Freelance Services

Upwork, a platform linking businesses with freelancers, has announced two acquisitions aimed at creating a new, independent enterprise-focused division that could expand its market reach.

The San Francisco-based company disclosed its acquisition of Bubty, a workforce management solution, and an agreement to acquire Ascen, a global compliance and employer of record firm, ahead of its second-quarter earnings call scheduled for August 6.

Upwork intends to merge these two companies into its existing enterprise operations, establishing a standalone entity under the Upwork brand.

This strategic initiative is vital as it allows Upwork to access talent beyond its established independent contractor pool, positioning the company to compete in new sectors of the corporate staffing industry. The new entity will provide various contract types, such as agent of record, employer of record, and staff augmentation.

Upwork President and CEO Hayden Brown stated to TechCrunch that the timing is perfect for launching this new enterprise-focused division, as current enterprise clients have been increasingly seeking access to these talent markets.

“Many providers today force clients to choose between flexibility and compliance, speed and scale, or digital tools versus a truly robust enterprise solution,” Brown noted. “With this new capability, we eliminate the need for compromise. We’re delivering all the benefits our clients have been asking for, and they’ve clearly expressed the desire for this unified solution.”

Brown mentioned that Upwork’s existing enterprise segment contributes around $100 million to the company’s overall annual revenue of $750 million.

Upwork opted to create the enterprise division as a separate entity because of the unique compliance and software integration requirements of enterprises compared to the small and mid-sized businesses that form Upwork’s core operations.

This separation aids in better external branding and enhances internal focus, according to Brown.

Brown stated that Upwork assessed over 100 potential companies for acquisition to develop this initiative. The selection of Bubty and Ascen was based not only on their individual strengths but also on their collaborative potential—Upwork ran pilot programs with both companies individually and collectively.

“The success of those pilots showcased the effectiveness of their technology and illustrated how seamlessly we could merge their offerings with our existing services to deliver something genuinely innovative in the market,” Brown added.

Details regarding the branding and comprehensive offerings of the new standalone entity are expected to be released later this year.