Freelancer Limited (FLN) Earnings Call Transcript & Summary

Hello, and welcome to the Freelancer Limited Annual General Meeting for 2021. My name is Matt Barrie, I'm the Chief Executive Officer of Freelancer Limited. I'll ask all mobile devices to be turned off. I don't know why I'm asking this. I've got a small number of people here actually physically or into silent mode, perhaps if you're on the call, if you can make sure that your -- there'll be noises that can distract from the proceedings today. And given the current situation of COVID-19, as well as the guidelines and restrictions that was issued by the state and the federal governments on meetings and travel today, Freelancer has made a decision to hold our AGM virtually, as well as physically, so it's a hybrid meeting. On the 20th of March 2020, ASIC issued a no-action statement with respect to holding virtual meetings, provided the companies provide shareholders a reasonable opportunity to vote and participate in the AGM. We have therefore decided to hold our AGM as a hybrid meeting with the quorum of shareholders nominated by the Board to attend the AGM physically and the remaining shareholders strongly encouraged to participate in the AGM virtually. I'm advised that a quorum of members are physically present, and I therefore declare the meeting open. The first order of business is to introduce my fellow directors who are present virtually at the meeting today. Mr. Darren Williams is a Non-Executive Director. Up until 2015, he was the Chief Technology Officer and an executive of the operating business. Darren is a member of the Nomination and Remuneration Committee and the Audit Committee. Mr. Simon Clausen is a founding investor and a Non-Executive Director. Simon is a member of the Nomination and Remuneration Committee and the Audit Committee. Also in attendance physically is Mr. Neil Katz, our Company Secretary and Chief Financial Officer. And I would also like to welcome Sandeep Kumar, the company's auditor and other representatives of the Hall Chadwick. There are 2 items of business on today's agenda: the Chairman's address and the formal business of the meeting, which includes voting on the resolutions outlined in the notice of meeting. Shareholders will be given an opportunity later in the meeting to ask questions and raise any relevant matters of the Board for discussion through me. So right now, I'm just going to go through a presentation. There was also, yesterday, a half year update, which was done online. We had a reasonably good attendance for that. That meeting has been recorded. And for any of those that are attending virtually, if you'd like to see the half year results, you can e-mail [email protected], and we'll send you a video recording of that, but that goes into sort of the meeting over the last 2 quarters in quite a lot of detail, so I'm going to present a more high-level overview of the business up until now. And if you'd like to have the detailed video recording sent to you of the half year results with Q&A, we can send that to you if you send us an email. So Freelancer as a group now consists of 3 businesses we have -- broadly in the great horizontal areas of labor payments and freight. So Freelancer is the largest business. It's the world's largest crowdsourcing marketplace with about 54 million users around the world, 247 countries, regions and territories and have about $4.5 billion worth of jobs have been awarded to date over the history of that marketplace. The second biggest business is Escrow.com. That's a global payments business. That's done USD 5 billion to date of transactions secured. This is a business that started in 1999, was funded by SoftBank, run by Fidelity. And basically is in a phenomenal position today, but it's a global payments business for buying and selling things that are complicated or expensive. And we also have a freight division, which we'll talk about a little bit later on, which consists of Freightlancer and Loadshift. And combined, those 2 businesses did 99 million kilometers of freight pro forma last year in calendar year 2020. Now Freelancer is really the partner in the new world of work, solving a trillion-dollar problem. 5 billion people on the planet live on $30 a day or less and need to get a better job. At the same time, there's a skill shortage. The defining characteristic of the 21st century is the competition for intellectual capital. Globally, every -- when we're -- the planet needs to have [indiscernible] children to maintain the population. And all throughout the world -- even in Bangladesh, the replacement rate is lower. So the birth rate is lower than the replacement rate, the fertility rate is low than the replacement rate. You've got to go to a place like Sub-Saharan Africa to be dramatically above. So we're not making any more people. At the same time, education as a percentage of discretionary income is dropping quite remarkably in the Western world. It's still very high in places like Korea and China, but low in the rest of the world. So we're not making any more people at the rate we used to, and we're not treating education as important as we should. But at the same time, we have a great emerging market in places like India, where you've got once in a lifetime influx of people into the workforce. In India, it's about 14 million people a year who are skilled young, hungry and native English speakers. And so all around the world, entrepreneurs, whether they're in small businesses, whether they're in midsized businesses or whether they're corporate entrepreneurs need to get things done. And we have the world's largest online workforce for getting things done and helping create the future through development of products and services through Freelancer.com. Now this is a high-level picture of our marketplace. Many of you have seen it before. The white lines are where our users are, the pink lines are where jobs being posted, the blue lines are where jobs are being performed, but we are global in nature, anywhere there's electricity and there's Internet, we have people. Primarily, jobs are being posted in the U.S., U.K., Canada, Australia and going to places like India, Eastern Europe, Southeast Asia and so forth. We have 53 regional websites, with 34 languages, we're in 19 currency -- 39 currencies. There's no other marketplace globally that has the breadth we have in terms of skills, users, languages and so forth and the ability to get things done right from something as simple as $10 right up to something in many hundred thousands of dollars to millions of dollars. We've had over 20 million jobs posted to date. We're extremely liquid. Nowhere else is liquid globally as we are. 63% of jobs get bid on within 60 seconds with a 24 average number of bids per project. And we're also in an environment where increasingly, over time, from here and for the foreseeable future, people were increasingly working online, trying working online for the first time and experiencing the ability to and the advantages of working online with people. In terms of the first half statistics, we had a phenomenal increase in web traffic. We're up 89% in terms of sessions to 132 million in the half year on the half year before, which is in 2020. A 136% increase in new visitors, 4 million increase in new registered users and so forth, and about almost 1 million jobs were posted on the platform. In terms of the dynamics, about 30% of the jobs are websites, IT and software, and there's hundreds of categories underneath that. About 28% of the jobs are broadly in the fields of design, and that covers everything from architecture to interior designs and music composition, CAD models and so forth, and they're very long tail. The average project size is around USD 200 and just over the long term, just trends up over time. And we're the lowest cost and largest cloud labor platform globally in terms of breadth of talent. Nowhere else has a greater breadth of talent than we do, and we're basically trying to build the Amazon space, the widest range at lowest cost. It's free to post a project. It's free to try to talk to people, see samples of work and so forth. If you award a job to someone and they accept it, we charge you 3%. On the freelancer side, it's free to sign up, free to talk to people, free to bid on jobs. If you win work, we charge you 10%. So it's very, very cost effective. This is an example of a project on the site. You post into a title description of budget. You put it live. 68% of the jobs get bid within 60 seconds, 24 bids on average, in some circumstances, hundreds of bids or more and then you can talk to people and select someone. The other way of getting work done is through posting a contest, you put up a prize, people compete for the prize. And you can -- it's a very iterative process, you can say I like this, I don't like this, change this, change that. And you can get to a solution pretty quickly. This is an example of some packaging design. It was done for USD 260 and there's 186 entries. Nowhere else in the world can you get so much collaborative contribution for so little cost to get things done. And you can do it in any of the 2,000 different categories. At the moment, we get 15 million entries per year going into contests from 1.5 million participants, about 1.3 million entries per month. 85% of contest get an entry within an hour. And it's actually about 280 entries per contest. This is 240, it's actually closer to 280 at this point in time. So the metrics are up to the right. So this is actually quite phenomenal. If you -- if you've never tried contest before for $10 and get some business cards done, you'll be absolutely amazed by what you can get done for so little and the quality. This is an example of some of the work that's been done through Freelancer. The quality is amazing. We're showing very visual things here in nature. But really, anything, any job you can possibly think of, you can post on the platform and get done from the skilled talent base that's global. And you can find any skill set you want, any language you want, any location you want. That's some pretty amazing quality of work there. We have an enterprise division, which is targeting bigger of the town. So this is Fortune 500 and equivalent organizations globally. We have a new leadership under Shaun McMeeken, who was the founding VP of Sales at Groupon. He took it from 0 in the Australia and New Zealand region to $1 billion in turnover per annum over 6 years and $250 million in revenue. In the first half, enterprise GMV grew about 227% in the second quarter and 213% in the first half. And new clients ramped up quite strongly and some of the new clients actually ramped up at least top 10 accounts. We've got some pretty exciting things going on. Deloitte, we've built a custom platform called Deloitte MyGigs for Deloitte Consulting USA, which is designed to connect Deloitte consultants with each other globally and Deloitte consultants to the cloud. Deloitte is the largest of the big 4. They've got 440,000 staff. They said to us they can't go 10x from here. That will be 10 million employees. They've got to go to a new model. And universally, Fortune 500s comes to a conclusion that some percentage of the workforce will come from the cloud in the future. They're not sure whether it's 5%, 10%, 15% or 25% that's the range. I'm not sure if it's 1 year, 3 years, 5 years, 10 years away, but that's the time period. COVID has accelerated everything, but they do know they're going to have to transform their workforces. And this is one of the greatest transformations in the workforce, I think, in history. And Deloitte is a great example of that. And we're now -- we've got to go ahead to go to stage 3 which ] is connecting their consultants to the cloud and there'll be 52,000 consultants to the world of 53 million freelancers. We've got some amazing things happening with other corporates as well, but we're also doing some great things with nation states now. So the government of Saudi Arabia and the government of Egypt are some examples. We've worked for some time with the government of Malaysia. And in fact, the government of Cambodia approached us this week. But in Saudi Arabia, they're building -- they have a national marketplace that they funded, so that all Saudi Arabian citizens will be able to participate in the world of work. And in fact, they're creating a new labor class in Saudi Arabia. So it's not just full-time jobs and casual jobs and part-time jobs, freelance jobs will be a new category recognized by the government, and they've approached us to help them with this. And also as part of that help skill up and train the citizens for the world of work online and to help that talent reach jobs from companies around the world and paying for them. And there's some pretty amazing things we're doing there in combination also with a major corporate in the region. And we're also doing this with government of Egypt. They've been paying us already to train up their workforce, get them online, get their profiles up and running and get first jobs won through companies, not just in Middle East but around the world. So we're doing things not just with large corporates and the largest corporates in the world, but also with large governments. We have another corporate engagement of note, which is pretty exciting, and there's many in the pipeline here in various stages of pilots, multi-country pilots, production and early stage where, for a global computer company, this is a computer company where probably you might have the products in your own home already. They're looking to transform the way that they do field services. And they've come to us because they need to have the scale and the scope and the reach to be able to provide technical repairs to computer and printer equipment around the world. And so when you go and break your computer in certain regions now and you go to their call center or you look something on their website to get your computer printer repaired, it is one of our freelancers who's been trained. He will go out to your location and repair or replace that item. We are successfully running in Indonesia. A pilot in -- India is now expanding to 18 regions, so it's going national. We have an Australian part, which has been in planning for a long period of time and has been slightly delayed due to the lockdowns but basically has commenced. And we have 13 other countries we're going to after that, including the U.S., and we've already started discussions about how going to do the U.S. launch. This is a very, very substantial engagement that -- it's a very, very meaningful number. If we can get to the price end of the rainbow in terms of the GMV contribution, it's very, very, very large compared to our global GMV. In the half, we also won the best comprehensive solution from the Lighthouse Research awards. There's a lot of stuff happening with NASA. We've won multiple task orders with them. We've won task order with the U.S. Bureau of Reclamation for about USD 300,000 worth of work for power engineering to find more efficient ways to test hydroelectric power energy systems so that you don't have to take them off-line when you do the testing. With the National Institute of Health through NASA, we have won [indiscernible] challenge for $400-and-something for finding ways to lower child morbidity through insights and data science. We have also won another task order with the U.S. Reclamation for river hydraulic modeling and segmentation modeling through optimization of computational fluid dynamics through effectively computational computer science to find more efficient ways to optimize large matrices. And in fact, this morning, we won the biggest task order yet with NASA for a software development. And we're basically going to announce that shortly in terms of the quantum and what we're doing there. And there's plenty more to come here with our relationship with NASA. But it just shows you, you couldn't get a more marquee organization globally than the U.S. space administration. And in fact, they've done such a wonderful job of embracing the future of work that they are now being used by all the government agencies, the federal government of the U.S. to help drive that through all sorts of different programs. We also have engagement with IBM, which I want to call out where they have committed to spend 7 digits more in terms of training freelancers to -- and IBM technologies to enable their customers to get Freelancer to help them adopt IBM solutions, and in addition with that, certify with IBM skills. That engagement is going incredibly well. We wrote a case study on that, and that's how we won the award from Whitehouse Research in the U.S. for [indiscernible] for 2021. And that award there. And there's some more details in this deck, which I won't get into detail. So we're not just working with low end and small projects and small business and SoHo, we're all out to the very high end and some of the largest organizations in the world is an example of the telecommunications infrastructure project. It was done for $1,500 in 2 weeks by Deloitte, which consists of a 70-page report. If you think about a 70-page report at the level that you have to do for a Deloitte customer, the ability to get this done for $1,500 is unparalleled anywhere in the world. This is for Airbus, 1 of the 2 top aerospace manufacturing companies for helping more efficiently, look at their assembly line in Telus, where they assemble Airbus planes and helicopters in particular, that was the helicopter line. This is Fujitsu in combinatorial algorithms. So we've done a lot of stuff for NASA. Over 14,000 designs have been sourced from 6,000 freelancers. We've won jointly a $25 million tender. I've talked about some of these task orders we've won and again another one this morning. We've worked for the U.S. Department of Energy. We've worked for Novo Nordisk. And in fact, over 70% of Fortune 500s do make use of the Freelancer platform. Not through our enterprise program in terms of an organized strategy, but just use the site anyway, just like I would think probably 99% of organizations now use eBay. And this number will increase over time, and we're going to get them into an organized program through our enterprise sales team. We've done a lot of work on mobile in the first half, and that's [indiscernible] power from space. We've redesigned the front-end architecture of the website, which is really a complete rebuild over the last couple of years, and we have deployed that, and that's allowed us to replace our mobile suite with a modern 2.0 version of mobile. Our first step with this was last year, replacing the mobile web version of Freelancers. So if you use your phone and use your web browser and go to Freelancer, we've replaced that with a responsive version of the desktop website. This has led to a dramatic increase in revenue from mobile web in the first half of this year. Fees were up 96% year-on-year. This has allowed us to replace our iOS and Android apps. Our iOS app is now a capacity wrap version of the responsive website. It's live, it's deployed. It's been out just for a number of weeks. Already, the revenue is up 15% year-on-year. We do expect to get closer to the triple digits that we've seen in mobile web. We can see a few things we've got to improve in terms of the polish, but that's out there. And Android is now in 50-50 production. In the next couple weeks, we're going to 100% in production. I'll report on that in the following quarters in terms of the progress. We have a managed service layer, which consists of 2 levels. The first is we have recruiters that will help you find the best [indiscernible] for the job. And we have a copart service, which is a project management service, where for an hourly rate, we will help you do anything you need with the project. We will listen to what you need, we'll write a spec for you. We'll break it down into tasks. We'll log it into the system. We'll hire freelances with the recruiters, and we'll run weekly sprints for you. And there's been a 38% increase in preferred talent earnings in the first half through this managed service program to our top freelancers. And we have an API, which allows you to harness 50 million people through a software interface. And we've build the first app, which is actually in the Play Store and it's in the iOS store, and you can download it and you can try it for yourself. But I've always said that you could build -- Uber has got 6 million or 7 million drivers last time I looked, maybe it's got 8 million, 9 million, 10 million now, I don't know what the number is, but we've got [ 54 ] million freelancers, and we probably have more drivers than Uber does. But the interface for freelancer is not great to be picked up in a car and driven somewhere and dropped off. You don't want to post a project to enter a description of budget, wait for people bidding select them, et cetera. The Uber interface is very simple. In fact, it's as simple as you can possibly get. You drop a pin for the location in and a car will pick you up and take you somewhere. And so we thought let's show proof of concept. Let's build an Uber for something and just show what we can do with 50 million people in our workforce and how liquid it is. So we built an Uber for photos. It's called Photo Anywhere. You can download it today. For $35, you can type in an address from anywhere in the world, some will go take a photograph and send it back to you, a series of photographs, 5 of them, for $35, and send them back to you within 24, 48 hours. I personally use this. And it has worked for me in Uzbekistan, it's worked for me in Timbuktu. It worked for me in Chernobyl. I've got photos back in 24 hours. It's worked for me in New York, Gili Islands, Bali, or even in India. It's worked for [indiscernible] in the middle of the U.K., the mountain in Wyoming and so forth. So it's a pretty amazing demonstration of liquidity of the platform, and there's a lot of innovation that can go from here. For example, there's a company in Asia worth about $10 billion called Gojek and it's available in 4 countries. And simply, you're typing an address, someone will go that address, buy an item for you and bring it to you, right? The ability for us to build this now in a matter of weeks to months is fairly straightforward. And this is a $10 billion company that services in 4 regions while we would be able to service the globe using the power of our workforce. And it's a job that's accessible to anyone. Anyone with a smartphone can go to location and buy something for you and bring it to you. So this is all powered by Freelancer Global Fleet and Freelancer Global Fleet is also what's powering the field services example I gave you previously with the global computer company. It's the ability to access a fleet of talent anywhere in the world, track their location, task them to go to locations and do things. And that's pretty exciting. This is senior management team. I won't get into details there, and we've won a bunch of awards and continue to win awards. So that's the first of businesses. The second of the businesses is Escrow.com. And this is a pretty phenomenal business. It's a payment system for buying and selling things that are expensive or complicated. It's solving 2 basic premises here. There's a lot of innovation around payments, but most of the innovation around payments is around buying and selling cups of coffee. So all the kids coming out of Stanford and Harvard, their experience is buying cups of coffee. So there's [indiscernible] ways of buying cups of coffee with their phone, of tapping a phone with someone else's phone and splitting the price of a cup of coffee or buy now pay later for a cup of coffee using facial recognition, maybe to pay for a cup of coffee, maybe lending you money to buy a cup of coffee. But they're not thinking about buying and selling cars, boat, airplanes, jewelry, gemstones, diamonds, importing shipment plans from overseas, oil wells, trips up to the space, et cetera. These are all either large payments or expensive or complicated payments. And there's 2 major problems in the payment space. The first problem is that payments above $3,000 really breaks down in the real world. Credit cards are great for about $3,000, then $4,000, $5,000, $6,000, $7,000, $8,000, $9,000, $10,000, $20,000, some cards might handle payments that big, but for the most part, they start to break down, right? Same with PayPal. You wouldn't sell or buy a house or a car with PayPal or a plane or a boat. Maybe at a very, very low end, but not anything of substantial size. The other problem is in untrustworthy environment, payments fail. I buy a phone on eBay, it gets sent to me. Maybe it's broken, maybe its -- screen's chipped, maybe it's not as described, maybe it's stolen. If I have a problem, we compete at the low end with buyer protection from PayPal and eBay, so -- and credit cards. And so I've got to fill in an insurance claim form, was it as described, is it in an insurable area? Is it within an insurable threshold? What actually happened? I fill in that form, I submit it. 6 to 8 weeks later, an insurance assessor might get back to me, and maybe I'll get my money back. And if it's eBay, it might get hold a rolling reserve for 6 months before I actually get my funds, so it's a terrible experience. With Escrow, quite simply, we hold the money until the transaction goes through, it's as simple as it is. So we're used for payments from hundreds of dollars up to $100 million or potentially more. And it's all sort of things here. And quite simply, we hold the money while the transaction goes through. It's a pretty phenomenal business. It's done USD 5 billion in payment volume. It's profitable business. In last year, it did USD 489 million in gross marketplace volume or gross payment volume. And in the first half of this year, we were up 43.7% year-on-year in terms of GMV. And in the second half -- second quarter of this year, we're up 105.5% in gross payment volume. And there's a picture of it just here in terms of GPV, where is it? I think this is actually out of this particular deck, but it's a pretty phenomenal up to the right graph, in terms of the growth rate. And in the second quarter, it more than doubled the volume through it. It has over 2 million customers, and we've got marquee platforms now starting to integrate Escrow for the first time. And that's really become enabled by our API, which we've built, so you can integrate Escrow as simple as PayPal. And that's been deployed and got out of beta really last year. One of our first marquee customers to integrate that was eBay Motors, USA. So in the U.S., you can buy and sell cars now for the first time and pay for them. What might be remarkable to a lot of people is most car platforms globally or car marketplaces are actually classified sites. You can't actually pay for the car because PayPal and credit cards break down. And so the car marketplaces around the world actually don't know if the car is sold. They make an assumption the car is sold when the listing doesn't get renewed. Listing gets posted, it gets renewed, renewed, renewed, the listing goes down, they make an assumption that the car is sold, but they don't know that for sure. We're in eBay Motors, the success of that led to eBay Watches. So now buyers and sellers can use Escrow to protect the transaction. For high-end luxury watches, they've also launched an authentication network to completely stop fraud on the eBay Watch marketplace. Traditionally, up until now, people might think, why would I buy watch from eBay, it might be counterfeit. The way they've stopped that is through Escrow.com and through the authentication network. So now if you buy a high-end luxury watch, the seller can no longer sell the watch directly to the buyer. It goes to a third-party authentication network. They'll authenticate it. We'll look at the watch, open it up, check the parts, make sure they're genuine, clean it, put a sticker on it, give you a certificate, put it in a nice box if it doesn't come with the original packaging and send it to you. Through the entire process, the money is held with Escrow.com. And then when you receive the box, you can then decide to hit the button to release the funds. We're going to go into more eBay categories. But there's a wide variety of areas within eBay we're going to touch, but that also in many different industry verticals. We've got a good presence in domain names and IP addresses. We're going to tip the whole automotive industry globally. We're in classic cars, we're in Hagerty. We're in AutoHunter, which is basically Autotrader U.S. We are in fine art. We're in Artsy. We're in Artland. We're in business sales mergers and acquisitions through Shopify and Flippa. If you want to buy a Shopify store, you have to pay with Escrow.com and so forth. And so it's a global business, but it's mainly in the -- some nexus to the U.S. And over the next couple of years, these are the industry verticals we're going to go into and [indiscernible] . These sectors get bigger and bigger and bigger as we go through. IP addresses, domain names, watches, fine art use construction equipment, import export jewelry used vehicles, M&A, manufactured goods to real estate. We are the only multi-jurisdictional online escrow company globally. We have 52 financial services licenses granted or in application. We're licensed in every state in the U.S. but 3, and the other 3 we expect to complete this year. We're literally in the final stages. We're licensed in Australia, we're licensed in Canada, and we have a license with the FCA in the U.K., which is also imminent. And it's an incredible business in terms of the moat around it from a regulatory perspective. There are only a very, very small number of niche escrow providers globally that might exist. This is California, for example. In the state of California, there's only really 4 operating businesses that currently exist today. There's Upwork, which only uses the escrow for themselves internally. The Seed Trust, which is the surrogacy. Vector, which is for marijuana and is us, and that's for the state of California, one of the largest markets in the U.S. So in boat, cars, airplanes, this is an example of a screenshot from eBay Motors. This is the first car that's sold through eBay Motors. It allowed a transaction to happen from 1 coast to the other coast securely, which is usually a difficult thing to do. Do I send the money first? Do I send the car first? We'll protect fine art, watches, antiques, jewelry. This is a screenshot of the eBay integration for watches in the U.S. There's 2 great little videos there. You can click on and download if you get access to this presentation and watch how eBay is promoting escrow to its customers. Every time we get integrated with the platform, we've got to promote Escrow because the regulators insist the consumer needs to know where their money is. We're integrating Flippa for business sales. We're -- this is [indiscernible] one that happened in the second quarter. We integrated with Energy Domain in the first half and mainly in the second quarter. We sold 240 gross acres of oil and gas and mineral rights. So people are buying and selling oil wells through Escrow. And this will lead us into real estate, which is a massive market globally. Industrial equipment, import, export, service contracts. And everyone in Silicon Valley knows the business because they bought their domain through us. Uber, Snapchat, SpaceX, Twitter, Instagram, Chrome, Gmail, Hulu, they all bought their domain names through Escrow.com. And there's API, which can now integrate which makes it super simple, and we have a great management team behind this business, and there'll be more to come from that. Now to wrap up the third business we've got, which I think is a bit of a quiet one. And -- but now is really coming to its harness is the freight division. And this is actually a phenomenal leg. Anything that's physical, that is sold through Escrow needs to be moved. And we make 1.3% roughly from Escrow and we make 13% from the freight. So there's a lot of synergy there. Furthermore, freight is 1 of the 200 categories of Freelancer. The process of getting a load moved from A to B, the technology is the same as on Freelancer.com. On Freelancer.com, you put in the title, a description, a budget, hit submit, people bid on the project, you pick someone, they do the job for you. In the freight division, you put in the title, a description, a budget, where you want something picked up, where you want something dropped off, drivers bid on it, you award them, they get paid and the job gets completed. It's exactly the same technology. In fact, what we're doing right now is we're moving the whole freight division on to an enterprise version of Freelancer. So 1 of the 2,000 different categories we have, and this is a phenomenal business for a bunch of different reasons. These are already existing customers. Newcrest Gold Mine, and Cadia in Australia, one of the biggest gold mines in Australia uses us and has spent over 7 digits in 12 months in terms of freight through Freightlancer. We've been used in the Sydney Metro. We've been used by Redpath Mining, a big Canadian mining company. Combined, pro forma, the Loadshift acquisition, combined with Freightlancer, did over 70,000 loads in 2020, up 29% year-on-year. And almost 100 million kilometers of freight. In the first half, we did 51 million kilometers of freight, up 20.6% on pcp. You can see that COVID has accelerated things. The roads are clear. And now is the time to be moving things around the country to get things done. And so COVID has been very, very beneficial for this business, primarily moving things like heavy machinery for construction, mining, rail and so forth, moving cars, moving pallet shipping containers. This is an example of Newcrest. And these are actually real pictures of things we've moved for Cadia, one of the largest gold mines in Australia, saving 30% because of the competitive environment for bidding. There's Redpath Mining actual pictures of what we've been moving. There's EMS actual pictures of what we've been moving. So it's an incredible business. We are, by far, the largest freight marketplace in Australia now. The aim is to take this global, and the aim is to monetize the 100 million kilometers of freight per annum with basically a commission-based model. I will say that on the average weekday now, more freight is posted in our freight division than the distance from the earth to the moon. The distance from the earth to the moon is 384,000 kilometers, and on the average day now, it's about 450,000 kilometers per day being posted. So there's a lot of freight that's getting moved with this particular business, and that freight needs to be paid for. It needs to be -- and so Escrow and Freightlancer go hand in hand. And in fact, the sales teams are actually going to enterprise customers independently and actually discovering they're talking to same customers. So the payments business is going into the auction marketplaces and talking to them and they're finding out the freight division is also talking to them about moving things. So very, very complementary businesses and the technology stack is exactly the same as the Freelancer technology stack, just with a bit of front-end tweaking. So that's a pretty amazing business, and there's actually more slides in the half year deck, if you'd like to look at them. So just some final wrap-up in terms of the half year results. So the first half year, group net revenue was $27.8 million, so in Aussie dollars, it was down 5.7%, but it was an all-time record in U.S. dollars and up 11% or 10.8% to $21.5 million. Freelancer was down about 11.5%. in Aussie dollars, but up 4% in U.S. dollars. Escrow had a record, it was $5.1 million, up 33.7% or USD 3.9 million or 56.9%. The GPV had a big jump up. It was $566 million, up 35.9% or USD 437 million, up 59.2%. So Freelancer was effectively flat at $68 million or an all-time record in U.S. dollars of 14% up to $52.4 million. In the first half, Escrow was up 48% to $475 million or 73% to USD 366.67 million. And in the second quarter, Escrow knocked the lights out with $270.5 million, up 75% on pcp or USD 208.5 million, up 105.5% on pcp. And in fact, ex China, it was even fast, it was up 113% in the quarter. So we're on track for over $1 million to go through our bank accounts for the first time in the group this calendar year. Currency did hit us this half pretty hard. It was negative 17.4%. 72% of our revenue is in Australian dollars and 4% -- sorry, in U.S. dollars and 4% is in Australian dollars. So it was really a translation to the accounts because our business primarily services U.S. customers. Gross margins were consistently higher at 83%. Operating EBITDA was effectively flat at negative $2 million, and operating NPAT, the same likewise and grew flat at $1.6 million or breakeven. We had positive operating cash flows and more cash coming into the business at $2.7 million. It is down a bit on the first half of last year, which had a month to half of $6.2 million. And cash and cash equivalents were still strong at $31.8 million. It's down $2.5 million, but $4 million was spent on acquiring the Loadshift business. And here we are, this indeed has a Loadshift. I won't go into the detail, but effectively, it's about $300 million worth of freight goes to that business every year, and the goal now is to try and monetize that. And the great thing is it's just like Freelancer in terms of the technology, but the average project size is not USD 200, it's $4,000. So these are very, very chunky projects, and there's a lot of volume that goes through this business. And we had hit a few records in the first half at the very end of the -- very end of the last quarter. We hit 520,000 kilometers of freight in a day on 20th of June, and we hit over 10 million kilometers of freight in a month. And this is what the GPV looks like. So a big uptick this year in terms of GPV. We got some work to do on the revenue, but we can chose operating leverage to wherever it's ready to really move. A little jump in revenue here is going to mean a lot to the bottom line. This is what the cash flow profile looks like. We got positive operating cash flow and we spent a little bit to buy business. This is what the GMV looks like for Freelancer. We had the best quarter in first quarter of this year that we've had since IPO in terms of the growth year-on-year. And the second quarter eased off a little bit as we cycled the second quarter of 2020, global lockdowns, where 94% of the world's workforce was subject to stay-at-home provisions. But we expect this to grow from here as we're doing a whole bunch of things around collaboration and so on. This is the graph I was looking for previously with Escrow. This shows you just sort of phenomenal quarter and the phenomenal last 12 months have been for the Escrow business. There's a 20-year history of quarterly growth in GPV. So $208.5 million in the second quarter and pretty soon, well, we'll be doing USD 1 billion a year through our bank accounts with Escrow. This is the P&L statement. We're really poised for some leverage here and the fact that the EBITDA, the EBIT and the NPAT is effectively at breakeven. So it doesn't take much in incremental revenue from here to really, really drive the profitability. You can see here, the employee expenses were up 13% in the first half. That was in line with the headcount, which is roughly about 12%, 13%. Administrative expenses were down 8%. Marketing-related costs were down 36% through a new predictive model for advertising targeting with Freelancer, which allows us to get a return on investment much more efficiently on the ads. We deployed that model in the second quarter. That -- we did actually have very tight constraints in that model. So we did actually cut the advertiser spend quite a lot and in fact, probably overshot. We will be ramping that spend up again in the third quarter and that will be driving the revenue as well positively in the third quarter. But the great thing is we have a model now which is much more efficient at predicting the return on investment for every dollar we spend in the paid channels. It's important to note that 66% roughly of all projects on the Freelancer are from repeat customers, about 33% are from new customers. And of those new customers, about 30% are from paid marketing as opposed to organic marketing or free marketing from things like SEO. We had a little bit of uplift in occupancy cost. That's really quite immaterial in the big scheme of things. That was really from the Sydney office that we moved to in March of last year, which is why we're kind of seeing that through now. And then there was a big drop in -- tiny drop in share-based payment expenses. So it doesn't take much in terms of revenue from here to really drop down to the bottom line. As you can see, there is not very much spend on marketing. There's no CapEx. It's basically on headcount. And any incremental gain in revenue, unless it's sucked up by headcount, it's going to accidently produce strong results on the bottom line. So we've 465 staff in the company at this point in time. This is a snapshot of the balance sheet. In addition to $31.8 million we've recorded here, there's another $41 million of cash off-balance sheet in trust with the Escrow accounts. And -- so much early to say at this point about that. Ended with about 55 million users in the group, 20 million jobs. And I think we're a pretty unique company, not just on the assets, but globally. So that was a fairly long presentation. I apologize for that. But if you'd like to learn more about more recently, what's been happening the business, you can email at [email protected], and we do have a recording of yesterday's half year results that has the Q&A in as well, and you can get a copy of that if you'd like. And also, we're always available to do one-on-ones with investors if you e-mail at same address and request a meeting. I will now turn to the formal business of the meeting. As the notice meeting has been sent to all shareholders, unless there are any objections, I will take it as read. You may, I believe, leave a message in the chat if you're online. So I'll wait for a second for any objections. And I'll just look at the operator to see if there's anything coming through in the chat. Chris? Nothing? All shareholders, by the way, have to show your video, if you have to vote apparently, that's just been advised by me. So if you do plan on voting, please turn your video camera on at this point. Thank you. Let the record show there are no objections. The first item of formal business in the agenda is to receive and consider the Annual Financial Report of Freelancer Limited and the Director's Report, Remuneration Report and Independent Auditor's Report for the year ended 31st of December 2020. Adviser Sandeep Kumar from the company's auditor, Hall Chadwick, is also present today and is available to answer any questions relevant to the conduct of the audit, the preparation and content of the audit report, and the accounting process adopted by the company and the independent auditor. Ladies and gentlemen, I'll take the Annual Financial Report, the Director's Report, the Management Report and the Independent Auditor's Report have been received. You'll be aware that we have distributed the annual report electronically and have offered proxy voting online. I will now invite members to raise any additional matter to the Board or the auditors which relate to those reports or activities of the Freelancer Group in general. Would any member physically present, ask me a question, please turn on video camera, stand -- well, not just standing, you can sit and state their name before proceeding with a question. Please wait until you're provided with the forum before asking your question. So with any member attending virtually, please use the chat function there on your screen to flag your intent to ask a question, and then the operator will then let us know that your question wants to be asked and also tell you what order there'll be answered. So now I'm opening it up for questions to Sandeep Kumar from the company's auditor, Hall Chadwick. Sandeep, hello. So we'll wait a minute. If anyone wants to ask a question, you can ping something to the chat, turn your camera on, and we will turn it over to you. Anything in the chat? Chris? Sorry, okay. So there's a general question, which I'll take later, from Alex, which I'll get to at the end. Okay. So we're up to the first resolution for the voting that the Remuneration Report of the company for the financial year ended 31st of December 2020, as contained in the Director's Report be adopted. Please note that the vote on this resolution is an ordinary resolution and is advisory only. The company each year reviews its remuneration policies and approach and strives to pay its employees fairly and competitively and with a view to reasonable expectations of the investment community. Before asking members to move and second the motion, I would like to give members an opportunity to raise any questions related to this resolution as it is now before the meeting. So anyone physically, could you please stand, wait for microphone, say your name, et cetera, which is going to be unlikely because there's a small number of people here. Would any person virtually, please turn your camera on and use the chat functionality on your screen to flag your intent to ask a question. And I'll then take your question in the order flagged. So I'll wait a few minutes if anyone wants to turn your camera on and ask any questions. Nothing, Chris? No questions. Could I please ask a member physically present to move a motion that Remuneration Report of the company for the financial year ended 31st December 2020 is contained in the Director's Report be adopted? Thank you, Adam Byrnes. Would another member care to second that motion? Katz. Our adviser received 26,581,090 proxy votes in favor of the resolution, 234,452 proxy votes against the resolution, 100,880 undirected proxy votes which can be voted by me as Chairman, 2,319,039 votes that can not be voted as they're excluded and 160,377,500 abstained votes. Those undirected proxies which I can vote for, voted for in favor of the resolution. I would now like to put the motion to the meeting. Would all those members who are in favor of the motion, please raise their hand. I think you can also turn your video camera on and raise your hand as well, if you want. Would all those members so raise your hand if you're in favor. Okay. [Voting]

Would all those members who are against the motion, please raise their hands? [Voting]

Okay. I declare the motion carried. Moving on to resolution number 2, that Mr. Simon Clausen, who is required to retire under the company's constitution and who being eligible offers himself for reelection, is reelected as a Director of the company. The resolution is an ordinary resolution. Mr. Clausen's credentials are outlined in the notice of the meeting. I also advise that Mr. Clausen fellow directors strongly support his reelection. Does any shareholder have a question related to this resolution? If you want to ask a question about Simon's reelection, you may do so by turning on your camera and putting something in the chat. Nothing, Chris? No. Would a member care to move a motion that Mr. Clausen's reelection occur as a Director? Thank you, Mr. Katz. Would another member care to second the motion? Mr. Byrnes. Our adviser received 174,682,744 proxy votes in favor of the resolution, 13,793,148 proxy votes against the resolution, 1,136,419 undirected proxy votes which may be voted by me as Chairman, and 650 abstained votes. I will now put the motion to the meeting. Would all members who are in favor of the motion, please raise their hand? [Voting]

Would all members who are against the motion, please raise their hand and turn their camera on? [Voting]

I declare the motion carried, and congratulations to Clausen on his reelection as a Director of the company. The next item on the agenda is Resolution 3 that pursuant to and in accordance with the Listing Rule 7.2, Exception 13 and for all other purposes, shareholders approve the company's long-term incentive plan and the grant of share rights and issue of underlying securities pursuant to the plan on the terms and conditions set out in explanatory memorandum of company in notice of meeting. The resolution is an ordinary resolution. I'm also advised the directors with Mr. Matt Barrie abstaining, unanimously recommend that shareholders vote in favor of Resolution 3. Is there any shareholder who have a question regarding this resolution? Nothing, Chris? No questions. Would a member care to move the motion along with long-term incentive plan? Mr. Katz. Would another member care to second that motion? Mr. Byrnes. Our adviser received 174,682,744 proxy votes in favor of the resolution, 13,793,148 proxy votes against the resolution, and 1,136,419 undirected proxy votes to be voted by me as Chairman, and 650 abstained votes. I'll now put the motion to the meeting. Would all the members who are in favor of the motion, please raise their hand? [Voting]

Would all members who are against the motion, please raise their hand and turn their camera on so I can see if you like do that? [Voting]

I declare the motion carried. The next item on the agenda is Resolution 4, the pursuant to Section 136.2 of the Corporations Act, the constitution of the company be amended and set out in the amended constitution with amendments marked up and tabled to the general meeting convened post notice of meeting. This resolution is a special resolution. I've been advised the directors unanimously recommend that shareholders vote in favor of Resolution 4. Does any shareholder have a question regarding this resolution, please turn your camera on, put anything in the chat? No questions. Would a member care to move the motion to amend the company's constitution? Thank you, Mr. Byrnes. Would another member care to second the motion? Mr. Katz. Our adviser received 174,682,744 proxy votes in favor of the resolution, 13,793,140 proxy against the resolution, 1,136,419 undirected proxy votes which may be voted by me as a Chairman, and 650 abstained votes. I've now put the motion to the meeting. Would all members who are in favor of the motion, please raise their hand? [Voting]

Okay. Would all members who are against the motion, please raise their hand and turn the camera on? [Voting]

I declare the motion carried.

We now move to Q&A, and you may direct your questions on any topic to any of the directors. I also have Adam Byrnes here and Neil Katz and Jackson Elsegood, who's the General Manager of Escrow, and Tom Cavanagh, who's the CEO of Freightlancer. So I presume you can ask anyone. I'm sure we can find a way to splice them into the meeting. We had our first question, Chris, already from Alex, which was what? How big does Escrow need to be before you'll spin it off? And the answer to that question is, at some point, Escrow will be a public company and will be standing on its own 2 feet. Now the question is, at what point in time may that occur and how big does Escrow need to be for that to occur? The great thing is that Escrow is getting to scale and is growing extremely rapidly. The GPV in the second quarter is up 105% year-on-year. And we are getting, this year, I mean, I won't give a forecast in terms of revenue, but if you look next year at the size and the scale that the Escrow business is potentially going to be, it's probably going to be the size and the scale that Freelancer was and the growth rates of the Freelancer was, if not faster, when Freelancer IPO-ed. So at the time of the IPO, Freelancer was doing about AUD 18 million in revenue on a forward basis. It IPO-ed in November, so it's towards the end of the year, so it had about 6 weeks before the end of the year and had about 80% year-on-year revenue growth rate. If you look at the Escrow business, it's going to be about the same size and shape in about 12 months from now. And from that perspective, I think the window is opening very soon in terms of -- look, think about the optionality of that business in terms of its future structure, where it's domicile, how it's domiciled. And when you might take it public, whether you might do a pre-IPO rounds, whether you might give it private for a few more years, which market you might head to and so forth. We've certainly received a fair bit of inbound discussion about this. There's a lot of interest in this business. I personally think this is going to be a phenomenal business in the longer term. It is unique in its nature. It is a -- has a very, very large regulatory motor around it. It is unique in its offering in terms of it can handle large transactions, which other payment systems don't -- can't do and complex transactions. It allows, for the first time, people to buy and sell things, like houses online, cars online, oil wells online, jewelry, import and export of shipping containers as opposed to letters of credit and so forth. And so this is going to be unicorn unquestionably. It's going to be, I think, much bigger than $1 billion business in time. And so I think the window where we can start thinking about these things is now. And certainly, there's lot of investors approaching us, want to have discussions about this. There's a question of ultimately which market it will end up on. I think for me, there are 3 different markets it could potentially end up on as a listed business. The easiest and the -- to list and the closest market would be the Australian market. And I think the window of opportunity for it to get to the Australian market, if we were to consider that route, basically, it's open for consideration now. And towards the end of next year, would look exactly what Freelancer looked in terms of the scale of the business, i.e., very roughly similar. Post that, we could consider the U.K. stock market because that's where you've got Worldpay, Adyen, GlobalCollect, et cetera, and a number of payments businesses as a bit of a home for payments businesses. Then ultimately, you've got the U.S. markets where you'd probably want to be doing $100 million in revenue before thinking of going there, although there are many exceptions. But that is a market where you might want to think about staying private a little bit longer before you go there. Now there's thinking around all those 3 markets. That thinking has commenced already. We have investors who are pitching us things at this point for different routes, including keeping it private for a bit longer. And we are thinking about these things at this point. There's been no decisions made. It's just the optionality is there, and I think the benchmark you can think about is towards the end of next year, kind of looks roughly in terms of parameters a bit like Freelancer looked. So you can kind of draw back to thinking about that. But also it's in a really hot market. It's also very unique and it has a massive moat. So -- and the markets now are significantly hotter, I would say, than they were in 2013. 2013 was when technology was eating the world and they were hot, but now they're in overdrive. So there are higher valuations being paid. There are higher multiples in the stock markets. There are bigger deals being done in the venture space. There are bigger valuations being paid in the venture space. And so it's a more attractive situation today that was in 2013 from a company's perspective. Any further questions? Yes. So the question about cash balances, which I'll probably pass off to Neil Katz, from Alex, which is about Freelancer's user obligations are often higher than the cash balances. Why is that the case? And effectively, are we using sometimes negative working capital to fund the business? Is there a way of getting you a microphone so you can answer question?

Yes, we do sometimes use negative working capital. We've been running this business for so long. We know the cash flow trends, and we know the way our user obligations work in terms of the timing of when payouts are required and some of our use obligations, even though they are reflected as current liabilities, we know that there's a percentage of those that are sort of more longer term in nature. So the cash flows are quite predictable from our perspective, we feel pretty comfortable with -- at the levels that we run that ratio of user balances to cash. So we expect to profitability quite soon, hopefully. We had the breakeven -- close to breakeven point. And as Matt says, it's not going to take very long for us to replenish those cash balances quite quickly in the near term.

Yes. So Freelancer.com as a business, correct me if I'm wrong, Neil, it was profitable in Q2 of last year, Q3 of last year and Q4 of last year is that right?

Yes.

And it was slightly negative in this half. It's a Freelancer business. Escrow was profitable in the third quarter of last year, fourth quarter of last year, first quarter of this year and second quarter of this year.

Yes. Well, if you look at our segment reporting and the half year report, the Escrow division was actually very profitable in the first half of the year. The Freelancer made a loss. But we're quite confident that we're able to get that close to breakeven and profitable in the near term. It's not going to take that much, just a small increase in revenue will turn it around quite quickly.

Next question. I will say there was a question about quarantine of balances. The Escrow business does quarantine user obligations. They're actually in trust or an escrow around the place. That's a regulated environment. In California, our Freelancer payments are in the Escrow environment, in a regulated environment, which are quarantined. But yes, there's another $41 million of quarantine cash off balance sheet. Chris? Okay. I've been for a little bit longer for further questions, sometimes people are a bit shy. They probably want to ask a question. But we've got everyone here and if you want to ask a question you can or if you want to do it privately, you can e-mail [email protected] and speak to any of us privately, including the management team. I know some investors like to do that, whether it's talked to Jackson about Escrow or Tom about Freight or Shaun about Enterprise. I'd like to mention, Shaun McMeeken is on the call. You can talk to him about Enterprise Sales, or Neil about financials or Adam about products. So any other questions for now. Wright asked anything -- any comment about the significant drop in share price in the last few days? The share price has a mind of its own. If I kind of knew how it worked, it would be great. Sometimes things are going well and it goes down. Sometimes things are going not so well and it goes up. It's a tightly held stock. It's about 23% free float. In the practical level of free float, it's probably a bit less than that because there's some long-term investors there that have been accumulating shares for some time. And so very little news can move the share price up or down a lot. I've seen before, the share price move up by 50% in 2 days, right, on the back of a fairly positive but a fairly small announcement. So it can get knocked around up or down. So it is a volatile stock. I think in the long term, it's going to play in our favor, right? Because in the long term, if you think about the business at a very, very high level, so last year, we did $890 million through the bank accounts. This year should be over AUD 1 billion, and we're breaking profitability, and we're in the broad areas of payments, freight and labor. We have marquee businesses with all 3. Freelancer with the largest online workforce globally for freelance talent. It's very strategic. For Escrow, it basically is the only online multijurisdictional escrow company globally that allows payments above a few thousand dollars and it's going to eBays and your Shopifies and so forth around the world. And in terms of freight, Tom now runs the largest Australian freight marketplace by a long way, more freight on the average day is posted in these marketplaces is more than the distance from the earth to the moon. This is a pretty amazing business with 3 real gems of assets, and I can't talk about Freightlancer in terms of the corporate side of that. But at some point, that will be a public company as well. And I think it's going to have even faster revenue growth than Escrow, right? So it's going to really knock the lights out because we've got the distribution already. We've got the jobs already. The loads are already being posted. It's $300 million of loads being posted every year on the platform. And so if you think about the share price, well, what's going to happen in the natural evolution of the group. So the group at some point will get index inclusion. At some point, it will go probably most likely into ASX 300 first. At that point, every fund manager in the country will have to own the stock. And the tightly held business in terms of the shares means that it's going to be very, very hard for every fund manager to get set, right? And at that point, when finally, there's realization around the true potential of this business and that is to come, I think, in my mind, properly valued, there's going to be a scramble for the stock. And I think that's where we're going to see the tightly held nature of the stock really take off. The other thing that's going to happen as well in the short term is we've just become traded in the U.S. on OTC Best Markets. So we're under the best category of OTC Best Markets, which is QX. That's the top tier. That's where Fortis Inc. is. And there's a bunch of other companies that have just recently gone OTC, and there's Adriatic Metals, which is a bit of a market darling at the moment in the precious metals space. They've just gone over to CQX. And the next step from there is DTC, which is basically electronic trading. At the moment, even though we're tradable in the U.S. with a ticker FLNCF, we're not actually visible on platforms like Interactive Brokers. And we'll become visible as soon as DTC goes through, which is a bit of an archaic process but it should happen in the next couple of months. And at that point, for the very first time, we'll actually appear on the U.S. share trading platforms. So our customers and our shareholders and potential investors will be able to purchase the stock without having to get an ASX share trading account. And it's a lot easier in countries like India to trade U.S. stocks on the U.S. OTCQX than it is in Australian listed stocks. So we have a lot of customers, 53 million, 54 million customers, and a whole bunch of them I know want to buy shares in Freelancer and at the moment, they can't because they can't get an ASX share trading account open. But the minute we go DTC, that we'll be available in those regions. So I think we're going to get some support from our customer base. So I think, again, it's going to play in our favor at that point. Any other questions? Okay. Okay. I'll read it out so we can hear. So Alex asked again, which payment gateway, domain names, watches, cars, et cetera, within Escrow, are you most excited about in the next 5 to 10 years? And what's -- let's answer the question first. I'll pass this over to Jackson to answer that one. Which category of Escrow are you most excited about?

Thanks, Matt. So the first part to say is that the size of transactions online is growing year-on-year. So those top end of transactions in 2005, no one would even think about buying a car online. Now the place that people start looking for their next car is online. And I'm excited to see where that trend goes in the next 10 years. So we're, right now, transacting oil fields online, the sky's the limit. I'm very excited to see what will happen with our partnership with energy domain and as we expand into oil and gas. And of course, that naturally lends itself into discussions around real estate, which, again, is going to be a very big vertical for us in the future.

Yes. And I -- if you ask the question for myself, I think automotive is pretty exciting for me. We're in eBay Motors. We're in Classic Cars. We're in Hagerty, we're in AutoHunter. We're in -- we're also in -- Jackson, you are feeling thick of it.

Yes. At best, I'll find out. The point about the automotive market is every customer is looking for a safe transaction. The sellers are looking for a safe place to sell, buyers are looking for their dream car and they definitely don't want to run into a scam. So Escrow a great fit for automotive marketplaces. And frankly, as we're seeing more and more adoption, the pace just picks up month-on-month, so both the inbound and for our sales team.

Yes. So it's a great question. There's a follow-up question, which I think was what the main thing was -- what is the most important thing you can do to enhance Escrow.com's moat? So maybe I'll answer it from my perspective, and then maybe Jackson, you can answer it from your perspective. The first thing I'll say is I think there's a massive regulatory moat. If I wanted to start this business again, and I could take the best people in the company, I could take Jackson and Neil and Adam and so forth and Shaun and so forth. And that's really starts this whole business all over again. I couldn't do it, right? I mean this is a business that only exists because it's started by Fidelity. SoftBank put USD 30 million into it, had 250 staff back in 1999. Actually, IPO-ed as a business unit of Fidelity with some other business units in 20000 -- it's probably back in 2001 approximately, and it's been going for 20 years. To operate in the U.S., there's 50 states. It's state-by-state licensing, 4 territories don't. 4 states don't require it, 6 territories, 52 licenses need to operate in the U.S. These states, to get license state by state by state takes years to get engaged with them. In some circumstances, 5 years. You need to be bonded in each state with multimillion dollar bonds. They've got different rules. In California, you've got to have an escrow manager that's licensed in sitting in an office. He his a button every week to let payments go out or every day. In Washington, you have to have a separate test account. In Arizona, you've got to offer interest to the customer, even though the other states expressly forbid taking and offering interest. It's all very complicated. The rules are all conflicting. It is extremely cumbersome. On average, we're audited every 2 years by a regulator. We're not just regulated in the U.S. but in Canada, Australia and soon to be the U.K., imminently in the U.K. So we're perpetually in audit. And funds it off-balance sheet in trust. So this is a very, very difficult business to get going and exists because of the regulatory environment Fidelity makes a because of the right environment and because Fidelity ran it for a decade and put a lot of money into it with SoftBank, et cetera, is the only reason that exists. And so that moat is huge. The more we get regulated around the world, licensed around the world, the bigger the moat. Regulators around the world are forming a view that marketplaces can no longer take payments and put them on the balance sheet. In Europe, under the Payment Services Directive 2, this is the case. In California, the Department of Business Oversight, which has now been renamed [indiscernible] wrong, I've got on this morning, Jackson, as DFPI, Department of Financial Protection and Innovation. Innovation, is it right? They have formed a view that if you hold money for the provision of a service, it's escrow. They wrote a letter to Airbnb and said cease and desist. They wrote a letter to Fiverr and said cease and desist. They wrote a letter to 99designs and said cease and desist. They wrote a letter to DesignCrowd and said cease and desist. They wrote a letter to Freelancer and said cease and desist. We said, "Well, it's okay. We actually have [indiscernible] escrow, we'll put it through escrow." So we put our California payments through escrow, right? But Airbnb had the financial resources to go and try and get regulated in every single state, and they went and spend that. Millions and millions and millions of dollars and took them a very, very, very long time or they could go on and talk to Jackson and pay 50 basis points, 60 basis points, what would you offer Airbnb, something like that probably?

I'll let you know as soon as I talk to them.

[indiscernible] over the volume, right? So from my perspective, increasing the regulators are forming a view that you're going to have to go towards an escrow business and actually insisting on it. And I think that regulatory moat is huge. Now Jackson, you probably have plenty of other moats you can think of.

Yes, absolutely. So the first thing to say is that Escrow.com right now today is the most licensed online escrow company in the world. So that regulatory moat in terms of acquisition of licenses is well formed. We can always extend that. And the question is, how would we extend it? The answer is through volume and through category specialization. So additional categories require certain additional licenses. We're always open to acquiring those and developing out the deepness of our relationships with regulators. So I'm always open to hearing about new license classes that we can enter. But primarily, the answer to that is volume. The more volume we are doing in each one of these states, in each one of these territories, the more well-known we are to those regulators and the easier it is for us to be on the right side of those regulations. So as we grow and mature as a business, I expect to enter additional license classes and deepen our relationships with all of our regulators.

Also I think we build a moat as we get integrated in places like eBay Motors and so forth. Like why would you integrate a second payment system if it exists -- existed, and they don't exist. So I don't even know of an escrow business with 2 licenses. Do you, Jackson?

None that jump to mind. Primarily, most escrow businesses are geographically located in just 1 state. So multi-jurisdictional is extremely rare.

Okay. Next question is probably for Adam, I wish he can get a microphone, is what's the main thing restricting Freelancer.com's growth? Just pass the microphone to Adam right now.

In terms of revenue growth, the #1 drag right now on Freelancer is the memberships. And I believe we've given a bit of talk in the commentary, but I'm happy to cover that now. The primary reason behind this drag is we basically made a big effort in the beginning of the year and late last year and throughout last year actually to reduce the amount of spammy bids in the marketplace. And when you speak to our customers, their #1, I believe, at least in the top 3 complaints is that our bids are a little bit spammy. And there's a bunch of reasons for that. We do offer a lot of bids on high-end plans to Freelancers and an effective bidding strategy in some cases, it's just copy and paste. Anyway, so we made a concerted effort to eliminate that spam or at least reduce it. And unfortunately, one of the -- like I sort of alluded to earlier, one of the big benefits of our high-end plans -- mid-tier and high-end plans is basically the amount of bids on offer. So by reducing the install. Creating penalties for spamming, we actually inadvertently devalued the primary benefit that our top -- mid and top end plans of it. Now I still believe this is a positive like net impact on the marketplace despite the aforementioned revenue loss. It really did clinically on the bid and address a major customer complaint. And so the strategy moving forward is basically three-pronged. The first of these prongs is to deprecate the lowest level plan, the intra plan. That plan costs $1 a month, and frankly, does not deliver a lot of value to our customers. So we're going to deprecate that and move those users on to basic, which is $5 a month. We'll make a bit of extra revenue from that. But on top of that, I think we'll deliver a lot more value to the freelancers. The second problem in this approach is just to add a lot more benefits through these mid- and high-end plans that are not just bids. And we've already released one of these, which is the bid insights feature, which provides freelancers doing volume bidding with a lot more analytics into their bids, how much the employees rate their bids, write the lily, pool, how quick do employers look at their bid, all these kind of stuff to apps like this, which enhances value quite a lot. And we did see some membership up -- sorry, some revenue uplift on this, but there's obviously a lot more work to diversify the benefits of these plans and create a lot more value in them. That's not just bids. And then the final prong in this strategy is obviously to release new plans and new lines of business. And the big one there is we actual have an existing plan called corporate, and we're going to expand that fairly dramatically with a new set of features talk more about that in the future. That should lead to some significant revenue growth.

And there's more discussion around that in the video from the half year results from yesterday. So if you like a copy of that, just please email [email protected] and we'll send you a copy of that from this day and there's a lot of discussion about in the Q&A. Any other questions? I think there's a question from Ray about the prospect of dividends? Or is the strategy, development spin-offs? We're not thinking about dividends at this point in time. Although, as I said before, I mean, when you've got breakeven profitability and you've got big numbers going to the bank accounts, $1 billion a year plus going through the bank counts, and revenue number where the revenue number is, any incremental jump in that revenue number has to be soaked up somewhere. Otherwise, it accidently makes profits. And there's no CapEx in this business, there's only OpEx and the OpEx is headcount. You can see the op headcount numbers is up 13% in the half on a year, and that was a 13% increase in headcount of 465 staff. There was a decrease in marketing expense with the new particular model, that will increase a little bit in the third quarter and the second half. But you can see that if that revenue number goes up by an extra $20 million, where is that $20 million going to go, right? You might increase the marketing, trying a few new things. You might increase the headcount by certain amounts, but you're not going to double the headcount, right? And so it's got to go somewhere, right? So we've been -- one thing we've done well at the businesses we don't dilute the shareholders. So we don't do excessive capital raisings are up to capitate cap rates, we have done -- we did -- we raised some money pre-IPO to buy a business never raised the operating capital. And I think it was something I can't remember exactly on what the number was, it's 2.5 or 1.5%. I can't remember what the number was, but we wrote about that content to our website, and that was it. And then we took it public and then it opened in the market, in the hundreds on the first day, and billion -- over USD 1 billion and hundreds of millions has been since. And there's no other money raised prior to IPO. And post-IPO, there's a little bit of small amount of money and it might not possible raise the IPO and then there was one other capital raise, which was to buy Escrow. And we ended up paying USD 7.1 million for Escrow, and that's going to turn into a -- my belief, it's going to turn to at least $1 billion business. So we don't dilute the shareholders unnecessarily. We create value for shareholders. So at some point, there's going to be excess profits and we're going to figure out what we have to do with them. But for now, it's basically building the 3 business we have now. And I think we've got a good position now with all 3 can really stand on their own 2 feet and become big businesses. And so that's what the focus is now is operation. Next question is, do you still run the business? Do you see it running in 10 years' time? If the shareholders let me, yes, I'll stay running it in 10 years' time. I love the business. I was up at 1 a.m. this morning talking to investors overseas, between 1 a.m. and 2 a.m. I spoke to some investors today actually for too long, almost for 2.5 hours, and Adam and Neil [indiscernible] AGM. But what I do, I spend all my time working on this. I don't really have much of a life outside of Freelancer. And I think it's exciting. And I think there's a long way to go. And for me, I want to build this into a very, very, very large company. That's a challenge, an extremely large company and do some amazing things and transform not just a lot of work in the world of international trade, in the world of water freight and I think the businesses are a pretty amazing and how they fit together, and we're kind of building the next Amazon on a shoestring budget. We've got a long way to go to get to Amazon's level but we're giving our best shot. Any other final questions before we wrap up for the day? Okay. Thank you. So thank you, everyone. So again, if you want the transcript of yesterday's half year results, you've got a video of that, please e-mail investor.com -- [email protected]. You can also email us for one-on-ones. Otherwise, I look forward to talking to you in the future, and thank you for joining the first half of 2021 financial results presentation -- or AGM, sorry. Thank you.