FREELANCER LIMITED — Investor Presentation 2014

Jan 27, 2014

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2014 BBY Technology Conference Freelancer Limited

29 January 2014

1

Important notice and disclaimer

This presentation has been prepared by Freelancer Limited (ACN 141 959 042) ( Freelancer or the Company ) and contains general background information about Freelancer’s activities. That information is current at the date of this presentation. The information is a summary and does not purport to be complete. It is to be read in conjunction with the Freelancer Prospectus dated 21 October 2013 and other disclosures lodged with the Australian Securities Exchange.

This presentation is not (and nothing in it should be construed as) an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security in any jurisdiction, and neither this document nor anything in it shall form the basis of any contract or commitment. This presentation is not intended to be relied upon as advice to investors or potential investors and does not take into account the investment objectives, financial situation or needs of any particular investor which need to be considered, with or without professional advice, when deciding whether or not an investment is appropriate.

Forward looking statements

This document contains certain "forward-looking statements". The words "anticipate", "believe", "expect", "project", "forecast", "estimate", “outlook”, “upside”, "likely", "intend", "should", "could", "may", "target", "plan" and other similar expressions are intended to identify forward-looking statements. Indications of, and guidance on, future earnings and financial position and performance are also forward-looking statements.

Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Freelancer, which may cause actual results to differ materially from those expressed or implied in such statements.

There can be no assurance that actual outcomes will not differ materially from these statements. Further information on important factors that could cause actual results to differ materially from those projected in such statements is contained in the Freelancer Prospectus dated 21 October 2013.

Non-IFRS information

Throughout this presentation, Freelancer has included certain non-IFRS financial information. The information is presented to assist in making appropriate comparisons with prior periods and to assess the operating performance of the business. Freelancer uses these measures to assess the performance of the business and believes that information is useful to investors. Gross Payment Volume, EBITDA, and EBIT have not been audited or reviewed.

All references to dollars are to Australian currency unless otherwise stated.

To the maximum extent permitted by law, Freelancer makes no representation or warranty (express or implied) as to the accuracy, reliability or completeness of any information contained in this document. To the maximum extent permitted by law, Freelancer shall have no liability (including liability to any person by reason of negligence or negligent misrepresentation) for any statements, opinions or information (express or implied), arising out of, contained in or derived from, or for any omissions from this document, except liability under statute that cannot be excluded.

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INDUSTRY DRIVERS

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- Key industry drivers the world is flat

60% of the world’s population are yet to use the Internet

• According to the US Census Bureau, in 2013, world population reached 7.1 billion[1] , only 2.7 billion (40%) of which are online[2] . The other 4.5 billion, representing some 60% of the world’s population, are yet to connect to the Internet[2] .

Internet Users by Development Level 2003-2013E

• In the developing world, 31% of the population is online, compared with 77% in the developed world[2] . Only 32% of Asia’s 4.3 billion[3] people, 16% of Africa’s 1.1 billion[3] people and 43% of Latin America’s 602 million people are online[3] .

• Internet penetration leading to an inflection point

• Freelancer believes that, over time, Internet penetration in the developing world (31%) is likely to catch up with the almost ubiquitous cellular and .

• mobile penetration found in these regions (89%)[2]

• United States Census Bureau, U.S. and World Population Clock, 10 August 2013.

• International Telecommunications Union, ICT Facts and Figures 2013, February 2013.

• United States Census Bureau, 10 August 2013.

Internet Users by Region 2013E

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- Key industry drivers the world is flat (cont.)

The rest of the world is connecting rapidly and self educating

• Large disparity in global incomes

Countries where English is an Official Language[1]

• English is an official language in populous countries in the developing world

• On the Internet, anyone can self-skill, and an education revolution is coming

• The wealth of human knowledge is increasingly available online with the rapid growth of the Internet.

• Traditional educational institutions are increasingly offering online education channels, able to be accessed by the masses.

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• In the last few years, the entire delivery of some courses has shifted online thanks to nascent online institutions.

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1. The British Council, Map of Countries where English is an Official Language, August 2013

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– Key industry drivers software is eating the world

“We are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy”[1]

• Traditional businesses are evolving into online/software companies

• Online marketplaces are a powerful business model due to network effects

• Examples of online marketplaces across a range of industries include Amazon, eBay, Getty Images, Alibaba, Craigslist, Airbnb and Uber.

• Jobs and employment opportunities are shifting online

• In the late 1990s / early 2000s as the Internet proliferated, a number of global web-based online marketplaces for jobs were created.

• In the late 1990s / early 2000s as the Internet proliferated, a number of global web-based online marketplaces for jobs were created. These marketplaces broke down geographic boundaries, and connected employers and freelancers, no matter where they were in the world.

• As the Internet has increased in bandwidth and sophistication, and human-computer interaction has improved, the type and sophistication of work that two people on the other side of the world can perform together has increased in scope.

Example industries dominated by software co’s

Industry	Software Company
Advertising	Google
Retail (books, shoes)	Amazon
Second handgoods	eBay
Travel agencies	Priceline
Real estate (Australia)	Realestate.com.au

Examples of other marketplaces

Company	Description
Legalzoom	Vertical marketplace in legal
Service Seeking	Trades marketplaces
ZocDoc	Health services marketplace
Task Rabbit	Local Jobs
99designs	Graphic design marketplace

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1. Marc Andreessen, Wall Street Journal, Why Software is Eating the World, 20 August 2011.

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– Key industry drivers structural changes in the developed world

Other structural changes in developed world economies are impacting demand for online outsourced services

• Casualisation of the workforce

• Nearly all the net job creation comes from high growth companies

• Skills shortage in the western world and the Baby Bust

• Growing mismatch between the skills employers need and talent available

• Remote or flexible work is increasing

• Online outsourcing benefits from economic turmoil

“160 million jobs, or about 11% of the projected 1.46 billion services jobs worldwide, could in theory be carried out remotely, barring any constraints in supply”

McKinsey Global Institute[1]

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1. McKinsey Global Institute, The Emerging Global Labor Market 2005, Part I: The Demand for Offshore Talent in Services.

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COMPANY OVERVIEW

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Evolution of Freelancer

Some of Freelancer’s key milestones since inception

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May-09: Jul-10: Jun-11: Nov-12: Nov-13:
Initial acquisition of Launch of Launch of Acquisition Freelancer
GAF (Sweden) freemarket.com Freelancer of vWorker / admitted to ASX
Contests Rentacoder ( ASX: FLN )
(USA)
Sep-09: Dec-10: Dec-11:
1 million 2 million 3 million
users users users
2009 2010 2011 2012 2013 2014
Nov-09: Nov-10: Apr-11: Jul-12:
500K Acquisition of 1 million Acquisition of Jul-13: Jan-14:
projects Freelancer.co.uk projects Scriptlance 8 million 10 million
posted (UK) posted (Canada) users users
Dec-10: Dec-12: Oct-13:
Acquisition of 4 million 5 million
Limeexchange projects projects
(USA) posted posted
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Freelancer today…

Freelancer is the world’s largest freelancing, outsourced services and crowdsourcing marketplace by total number of users and number of projects posted

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Total users [1] Total projects posted [2]
12.0 6.0
5.22
9.68
10.0 5.0 4.64
7.99 4.07
8.0 4.0
3.56
6.82
6.09 3.10
6.0 5.43 3.0 2.76
4.87 2.42
2.13
4.0 2.0
2.45 [2.72 3.02 3.33 3.72 4.21 ] 1.15 [1.36 1.60 1.85 ]
2.0 1.0
- -
●
Over 600 categories of work including website design, information technology, software development, mobile
applications & computing, writing & content, design, media & architecture, data entry & admin, engineering & science,
product sourcing & manufacturing, sales & marketing, business, accounting, human resources & legal and translation
& languages.
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1. Number of User Accounts in the Freelancer Marketplace as at 31 December 2013. User data includes all users from acquired marketplaces including, but not limited to GetAFreelancer, EUFreelance, Scriptlance, LimeExchange and vWorker/RentACoder. Prior to 2009, all data is from acquired marketplaces.

2. Number of Projects Posted in the Freelancer Marketplace as at 31 December 2013. Project data includes all projects from acquired marketplaces including, but not limited to GetAFreelancer, EUFreelance, Scriptlance, LimeExchange and vWorker/RentACoder. Prior to 2009, all data is from acquired marketplaces.

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Competitive landscape

Freelancer is the world’s largest freelancing, outsourced services and crowdsourcing marketplace by total number of users and number of projects posted

• The worldwide online outsourcing industry is fragmented with revenue spread across a number of participants.

• Globally, the three largest outsourcing marketplaces are Freelancer, oDesk and Elance.

• In December 2013, oDesk and Elance announced a merger (pending regulatory approval).

• Freelancer is the only company of the three that operates regional marketplaces (40 currently, for example freelancer.cl in Chile), that is multilingual (31 languages currently) and is multicurrency (18 currencies).

• Outside of the three market leaders, there are a large number of much smaller marketplaces. These marketplaces are often concentrated on a geographic region (e.g. Twago in Germany), or a vertical segment (e.g. 99designs for Graphic Design).

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Our mission statement

To help entrepreneurs globally by connecting entrepreneurs running small business in the developed world with entrepreneurs running service providers in the developing world…

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Global, and growing

Current network of 40 regional websites and supporting 31 languages

40 regional websites

31 supported languages

Afrikaans	Français	Português
বাংলা	�हनद	Română
Català	Magyar	русский язы
Čeština	Bahasa Indonesia	Shqip
Dansk	Italiano	Svenska
Deutsch	日本語	Kiswahili
ελληνικά	한국어	Türkçe
English	Bahasa Malaysia	Tiếng Việt
Español	Norsk-Bokmål	中文(简体)
Suomi	Nederlands
Filipino	Polski

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Freelancer’s marketplace dynamics

Our employers are predominantly entrepreneurs and small businesses in developed countries, whilst our freelancer community is predominantly located in developing countries

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Top employer countries [1] Top freelancer countries [2]
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United States India
United Kingdom Pakistan
India Bangladesh
Australia Romania
Canada Philippines
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1. Based on number of location-verified users that have posted projects in FY13. 2. Based on number of location-verified users that have been awarded a project in FY13.

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Revenue model

Freelancer’s revenue is primarily generated from users posting jobs – as a project (outsourcing) or a contest (crowdsourcing)

• The main fee income is from project commissions generated when projects are awarded by users and subsequently accepted by other users.

• These fees vary by project value, and are paid primarily as an introduction fee at the time of acceptance.

• Freelancer generates project commissions between 0-3% of the value of a project from employers, and 3-10% of the value from freelancers.

• The actual commission depends on whether a user is on a free or paid membership plan.

• Membership plans range from US$5 to US$49.95 a month, and provide additional features and benefits.

• Freelancer also generates fees from other services including project upgrades, crowdsourcing contest upgrades, bid upgrades, transaction fees, advertising and certification fees.

● Our Reputation System

• Freelancer’s proprietary reputation system provides trust, security and increases the quality of the marketplace. The reputation provides social proof, and users with higher reputations have a higher chance of getting hired or having users bid for their projects.

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GPV and Revenue

Forecast Gross Payment Volume up 59% and Revenue up 73% in FY13F

Gross Payment Volume[1] and Net Revenue[2] (A$m)

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GPVNet RevenueTake rate 115.0114.0113.0112.0111.0110.0109.0108.0107.0106.0105.0104.0103.0102.0101.0100.0120.0119.0118.0117.0116.099.098.097.096.095.094.093.092.091.090.089.088.087.086.085.084.083.082.081.080.079.078.077.076.075.074.073.072.071.070.069.068.067.066.065.064.063.062.061.060.059.058.057.056.055.054.053.052.051.050.049.048.047.046.045.044.043.042.041.040.039.038.037.036.035.034.033.032.031.030.029.028.027.026.025.024.023.022.021.020.019.018.017.016.015.014.013.012.011.010.09.08.07.06.05.04.03.02.01.00.0 28.016.8%4.7 35.618.1%6.5 50.820.9%10.6 80.922.7%18.3 25.0%20.0%15.0%10.0%5.0%0.0%
FY10 FY11 FY12 FY13F
GPV growth [1] - 27.4% 42.6% 59.3%
Revenue growth [2] - 37.4% 64.5% 72.6%
Take rate 16.8% 18.1% 20.9% 22.7%
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• Gross Payment Volume (GPV) is calculated as the total payments to Freelancer users for products and services transacted through the Freelancer website plus total Freelancer Revenue

• Freelancer’s take rate is calculated as Freelancer Revenue / GPV

• Based on Freelancer’s unaudited management accounts for the years ended 31 December 2010, 2011 and 2012, and its internal management forecast for the year ended 31 December 2013, which has not been subject to an auditors review.

• Based on Freelancer’s pro-forma historical financial results for the years ended 31 December 2010 and 2011, its historical financial results for the year ended 31 December 2012, and its forecast financial results for the year ended 31 December 2013. Details of the forecasts are set out in Section 4 of the Prospectus dated 21 October 2013 together with the underlying assumptions and qualifications.

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Financial highlights

Key financial highlights

	FY10	FY11	FY12	FY13F
(A$m)	Pro-forma	Pro-forma	Statutory	Prospectus
31 Dec y/e	Actual1	Actual1	Actual1	Forecast1,2
Net Revenue	4.7	6.5	10.6	18.3	●Strong track record of revenue growth
Gross Profit	3.9	5.6	9.3	16.1	●Gross margins indicate scalable business
margin (%)	82.6%	86.7%	87.4%	87.6%	model
Operating expenses	(3.2)	(6.1)	(8.5)	(14.9)	●Opex predominantly employee (Australia & Philippines) & related costs
FX gains / (losses)	0.2	(0.1)	0.0	(0.5)
					●FX gains / (losses) predominantly relate to
					unrealised changes in AUD value of cash and
EBITDA	0.9	(0.6)	0.8	0.7	user obligations
EBIT	0.9	(0.6)	0.7	0.6
NPAT	0.6	(0.5)	0.7	0.5	●Cost base has historically been managed to be
					marginally profitable

1. Based on Freelancer’s pro-forma historical financial results for the years ended 31 December 2010 and 2011, its historical financial results for the year ended 31 December 2012, and its forecast financial results for the year ended 31 December 2013. Details of the forecasts are set out in Section 4 of the Prospectus dated 21 October 2013 together with the underlying assumptions and qualifications. The Directors do not represent or give any assurance that any of the forecasts will be achieved, as the realisation of forecasts can be affected by numerous factors, many of which are outside the Directors’ control.

2. FY13F includes $0.35m of expensed IPO costs ($0.24m net of tax).

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Our strategy

Freelancer’s mission is to help entrepreneurs globally by connecting entrepreneurs running small businesses in the developed world with entrepreneurs running service providers in the developing world

• To achieve its mission and realise its vision, Freelancer’s strategy focuses on:

• aggressively developing Freelancer’s services so that our users can work together on any job, in any country, in any language and at any time in the world;

• continued investment in our unique engineering, growth and customer experience teams and cutting edge technology, to make the experience as high quality and seamless as possible;

• strong investment in the Freelancer brand globally to drive awareness, volume and revenue; and

• continued assessment of global strategic acquisition and expansion opportunities.

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QUESTIONS?

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