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The Future of Work: The Freelance Marketplace Industry

Ricardo Pitton

April, 24, 2024

12 min. reading

Freelancer marketplaces are online platforms that connect freelancers, who are independent professionals offering their services, with clients or businesses in need of specific tasks or projects. These marketplaces serve as intermediaries, facilitating the process of finding, hiring, and managing freelancers for various types of work. Freelance marketplaces have become increasingly popular due to the growth of the gig economy and the flexibility they offer.

Freelancer marketplaces have significantly impacted the gig economy by providing a platform for independent workers and businesses to connect for short-term commitments or projects. This new way of working has several benefits for both businesses and workers.

Businesses save money and resources as they don’t have to provide employee benefits like health insurance, sick leave, office space, training, or equipment. They can also contract with experts who may be too expensive to hire full-time.

Freelancers can improve work-life balance compared to traditional jobs. They can accept new types of work that interest them and fit around their individual schedules. They are not stuck in a full-time job, nor do they have to stick to a set workday. 

The Rise of Freelance Work

Freelancers contributed $1.27 trillion to the U.S. economy in annual earnings in 2023 according to Upwork Freelance Forward 2023 Reserach

In 2023, 38% of the U.S. workforce, or 64 million Americans, performed freelance work, an increase from 60 million professionals in 2022. This increase also contributed to a more significant economic impact of $1.27 trillion to the U.S. economy in annual earnings. 

On average, every year over the past decade, an additional 1 million people in the U.S. decided to join the freelance workforce. That same year in 2014, freelancers contributed an estimated $715 billion to the economy. That equates to a 78% increase in just a decade. When this seminal annual study was started in 2014, 53 million Americans were already freelancing. 

According  2023 Freelancer Insights Report by Payoneer, online marketplaces are the primary meeting places for businesses and freelancers. 

Freelancers today get most of their business online. While 70% of the respondents find most of their work through online marketplaces, only 11% rely on more traditional sources such as word of mouth and referrals.

The takeaway for businesses is that to find the best talent for a project, the entire world’s talent pool is available to access across multiple niche marketplaces, with the expertise that specializes in needed line of work. That’s why up to 90% of businesses are now using freelance platforms as a key part of their talent finding strategy.

Freelance Industry and Marketplaces play a fundamental role in the gig economy, which is expected to continue growing, valued at $455 billion by 2023. 

Both businesses and individual workers can greatly benefit from this type of economy, which continues to grow exponentially every year3.

Types of Freelance Marketplaces

The freelance marketplaces industry can be divided into several sub-industries based on the type of services offered and the business model used: 

  1. Online services marketplaces: These platforms connect freelancers with clients who need services such as graphic design, writing, programming, and marketing. Examples of companies in this sub-industry include Upwork, Fiverr, and Freelancer.
  2. On-demand services marketplaces: These platforms connect freelancers with clients who need services on-demand, such as ride-sharing, food delivery, and home cleaning. Examples of companies in this subindustry include Uber, DoorDash, and Handy.
  3. Crowdwork marketplaces: These platforms connect freelancers with clients who need large-scale, repetitive tasks completed, such as data entry, content moderation, and image tagging. Examples of companies in this sub industry include Amazon Mechanical Turk, Clickworker, and Figure Eight.
  4. Professional services marketplaces: These platforms connect freelancers with clients who need specialized, high-skilled services, such as legal, financial, and consulting services. Examples of companies in this sub industry include Toptal, Catalant, and HourlyNerd.
  5. Creative services marketplaces: These platforms connect freelancers with clients who need creative services, such as photography, videography, and music production. Examples of companies in this sub industry include 99designs.
  6. Local services marketplaces: These platforms connect freelancers with clients who need services in their local area, such as home repair, pet care, and personal training. Examples of companies in this sub industry include Thumbtack, TaskRabbit, and Rover.

Education and training marketplaces: These platforms connect freelancers with clients who need education and training services, such as online courses, tutoring, and coaching. Examples of companies in this sub industry include Coursera, Udemy, and Chegg Tutors.

Industry Business Model

Freelancer marketplaces typically charge a commission or service fee on the transactions between freelancers and clients. The fees can vary depending on the platform and the freelancer’s earnings. For example, Upwork charges freelancers a fee that can be a percentage of their earnings, which reduces the already low rates2

Similarly, Fiverr takes a percentage of freelancers’ earnings2. Some platforms also charge membership fees, project fees, withdrawal fees, payment processing fees, bidding fees, contest fees, certification fees, background check fees, and drug test fees12.

Upwork Business Model

Upwork Business Model example

Upwork connects businesses with freelancers, allowing them to get work done without hiring a permanent employee. The platform is divided into two segments: companies and freelancers. Companies post job descriptions on the Upwork portal, and freelancers apply for the work by bidding on the project. 

Upwork tracks freelancers’ work using data points like the hours they put in to complete the tasks, and discourages users from negotiating outside of the platform to protect freelancers from clients’ refusal to pay for the work done. 

Upwork’s revenue model is based on all the services offered by freelancers to their clients, with a service fee ranging from 5% to 20% depending on the amount of billing history they have with clients and the subscription plan they choose. Upwork also charges fees for handling payments and an administration fee of 3% to each transaction, paid by the advertising business. 

Additionally, Upwork charges businesses a subscription fee to access its platform, with two subscription plans available: Upwork Plus and Upwork Business. The Plus subscription costs $49.99 per month, and the Business subscription costs $849 per month, with better rates for payment processing and service fees. 

Their success can be attributed to its ability to stand out from other freelance platforms in a highly competitive and rapidly growing environment, with features such as time tracking, secure payment, and dispute resolution. Upwork’s business model is a brokerage model, where the platform serves as a middleman between businesses and freelancers, connecting them to complete transactions and earning a commission once a transaction is completed.

Payment Methods

Understanding the diversity and functionality of payment methods in freelancer marketplaces is crucial for both freelancers and clients to choose the most efficient and secure ways to conduct transactions. Freelancer marketplaces often integrate multiple payment solutions to accommodate the global nature of their user base, addressing varied local and international banking regulations, currencies, and payment preferences.

Digital Wallets (e.g., PayPal or Payoneer): Digital wallets provide a quick and easy way for freelancers to receive payments worldwide. They are known for their strong security features and the ability to handle multiple currencies. However, they can come with higher transaction fees, which is a significant consideration for freelancers managing tight margins. Additionally, freelancers in countries in the Global South may encounter difficulties when trying to withdraw funds to their local bank accounts. Restrictions or lack of support for certain currencies can leave money effectively trapped within the wallet, complicating access to funds that are crucial for their operations.

Credit and Debit Cards: Direct card payments are convenient for clients but require freelancers to use secure payment gateways that comply with the Payment Card Industry Data Security Standard (PCI DSS). This ensures that sensitive card information is kept safe during transactions.

Bank and Wire Transfers: Ideal for larger payments due to their reduced fees at higher amounts, bank transfers are secure and straightforward but can be slow and require more information from both parties, potentially complicating quick payments.

Electronic Funds Transfer (EFT): EFT is widely used for its efficiency in processing regular payments. It’s particularly favorable for freelancers with ongoing contracts, providing a reliable and consistent payment method.

Freelancer Platform Wallets: Many platforms incorporate their own wallet systems, where payments are kept in the freelancer’s platform account and can be withdrawn according to their needs. While secure and integrated within the marketplace, these can sometimes lead to delays in accessing funds due to holding periods or withdrawal limits.

Online Payment Solutions and Gateways: These are often embedded within the marketplace and offer a balance between security and convenience. They facilitate payments directly on the platform’s site, streamlining the process and reducing the need for third-party services.

Paper Checks: Although decreasing in popularity, some freelancers prefer paper checks for their familiarity and direct nature. This method is generally slower and may include postal delays or additional banking fees for check processing.

Industry Trends

Geographical Insights

North America currently dominates the market due to the strong presence of SMEs and tech companies, while Asia Pacific is expected to be the fastest-growing region4.

USA: In 2023, 38% of the U.S. workforce, or 64 million Americans, performed freelance work, an increase from 60 million professionals in 2022.

India: India saw a massive 46% increase in new freelancers from Q1 to Q2, 2020 with 15 million of users. 

Brazil: Over 15 million self-employed workers

UK: 4.39 million people identified it as their main source of income in 20221.

Philippines: The Philippines Freelance Market 2022 Report by Payoneer and GCash states that at present, about 1.5 million Filipinos are providing freelancing services on different online platforms overseas.

The freelancer marketplace industry is growing globally, with different platforms focusing on specific regions or countries. For example, PeoplePerHour is great for UK-based freelancers, with clients predominantly from the UK. Some platforms, like Blackbear, offer standalone assignments as well as long-term projects or entire business processes. These platforms work closely with businesses to analyze their backlog and turn it into actionable assignments, then source the skills for that project and facilitate the delivery from start to finish.

Where is their community located? Where in the world is it booming and growing?

In the realm of freelance marketplaces, unlike industries such as market research that often focus on platforms based on users’ locations, freelance marketplaces emphasize significantly on the talent and skills of individuals, regardless of their country of origin. This distinction highlights a global approach to talent acquisition, where the primary concern is a freelancer’s ability and specialization rather than their geographical location.

Freelance platforms like Toptal are known for connecting clients with highly skilled freelancers from around the world, focusing more on professional skills and experience than on location. This is especially beneficial in fields such as software development, graphic design, and consulting, where remote work has become an effective and accepted norm.

Moreover, remote work platforms enable workers from emerging economies to access job opportunities that offer comparatively high pay, which would not be feasible within their local markets. This global openness not only democratizes access to high-quality employment but also helps to mitigate economic inequalities worldwide, allowing companies to find the best talent without being limited by geographical barriers.


  • Growth Rate in 2023: +208%
  • Key Growth Drivers: A wide pool of skilled workers catering to the global market, a burgeoning tech industry, and an increase in companies seeking freelance services.


  • Growth Rate in 2023: +160%
  • Key Growth Drivers: A broad and qualified workforce, expanding tech industry, and economic growth driven by digitization and the large youth population.


  • Growth Rate in 2023: +87%
  • Key Growth Drivers: Increase in companies seeking freelance services.


  • Growth Rate in 2023: +86%
  • Key Growth Drivers: Increase in companies looking for freelance services.

Hong Kong:

  • Growth Rate in 2023: +79%
  • Key Growth Drivers: Increase in companies seeking freelance services.


  • Growth Rate in 2023: +72%
  • Key Growth Drivers: Increase in companies seeking freelance services.


  • Growth Rate in 2023: +71%
  • Key Growth Drivers: Growing number of companies looking for freelance services.


  • Growth Rate in 2023: +69%
  • Key Growth Drivers: Fast-growing freelancer market, a large pool of talented workers, and a burgeoning tech industry.


  • Growth Rate in 2023: +66%
  • Key Growth Drivers: Emerging market economy, strong Latin American presence, and an increase in companies looking for freelancers.


  • Growth Rate in 2023: +66%
  • Key Growth Drivers: Emerging market economy, strong Latin American presence, and an increase in companies seeking freelance services.

The factors driving the growth of freelancers in these countries include a combination of high demand, supportive policies, and easy ways to get paid.

Additionally, emerging market economies and a strong Latin American presence contribute to freelancers’ growth in these countries. The growing number of businesses seeking freelance services is also driving the growth of freelancers in these countries. 

Furthermore, a large pool of skilled workers catering to the global market and a burgeoning tech industry are also contributing to the growth of freelancers in these countries.

Growing freelancer countries in the Global South

The fastest growing freelancer countries in the Global South in 2023 were India and the Philippines. India had the second fastest-growing freelance market in the world at the beginning of 2020, trailing only the USA4

By revenue growth, the Philippines is currently the fastest-growing freelancing country3. These countries have a large talent pool, competitive pricing, and proficiency in English, making them attractive destinations for hiring freelancers across various fields. 

Additionally, Asia, India, and Bangladesh are fast-growing freelancer markets with a large pool of talented workers and a burgeoning tech industry1. However, it should be noted that the search results did not provide a comprehensive list of the fastest-growing freelancer countries in the Global South in 2023.

Key factors driving growth by region

The factors driving the growth of freelance marketplaces in the global south include:

  • Increasing need for change in employee hiring processes
  • The emergence of remote work
  • The growth of the gig economy 
  • Rapid digitalization
  • Benefits offered by freelance platforms such as globalization & cross-border collaboration, cost-effectiveness, and scalability2

The rise of the gig economy has made it easier for people to find freelance work through online platforms, and businesses affected by resignations in recent years have turned to freelancers to address their skill gaps and project needs3. The need for cost-effective solutions is also driving the growth of freelancing, as organizations look for more cost-effective ways to run their operations, including hiring freelancers3

In Asia, 60% of freelancers engage in traditional work on a per-project or contract basis with employers, and accounting is one of the most sought-out skills among freelancers today3. The demand for freelance designers is expected to grow by 23% in 2031, and more than 50% of freelancers in the US are female3. The website has as many as 800,000 registered Filipino users, highlighting the growing trend of freelancing in the global south3.

In Europe, freelancing is fueled mostly by personal choice instead of constraints, and more European companies and employees are slowly realizing the relevance of freelancing in the new ways of work in the region3

Growth Projections

The global freelance platforms market size was valued at USD 4530.44 million in 2022 and is expected to expand at a CAGR of 13.66% during the forecast period of 2023-20301. Their market is projected to reach USD 9192.9 million by 2027

The growth of the freelance marketplace industry is driven by the increasing demand for online content, the growing popularity of social media, and the rising need for effective marketing strategies. The industry is also experiencing significant growth due to the increasing digitalization of businesses and the growing importance of content marketing in driving sales4. The market is witnessing steady growth due to increasing demand for content marketing from businesses relying more on digital means of communication and outsourcing their content generation needs4

Shaping the future of work in the Digital Economy

As we observe the evolving landscape of the freelance marketplace industry, it’s clear that these platforms are not merely a trend but a fundamental shift in the global work environment. The remarkable growth in freelancers and their substantial contribution to the digital economy highlight an irreversible move towards more flexible, diverse, and independent ways of working. This evolution is reshaping career paths, business strategies, and even the very notion of employment.

Freelancer marketplaces have democratized access to opportunities, allowing skilled professionals from all over the world to connect with businesses that need their expertise. This global talent pool is an invaluable resource for companies seeking to innovate and adapt in a dynamic market. Moreover, these platforms have become catalysts for economic growth, particularly in regions where traditional employment opportunities are limited.

Looking ahead, the integration of advanced technologies such as AI and machine learning could further revolutionize these platforms, enhancing the matching of projects with the ideal candidates and streamlining transaction processes. As remote work becomes more standardized, and companies continue to value flexibility and specialized skills, the significance of freelancer marketplaces is only set to increase.

The future of work is being written today in the freelance marketplace industry. By fostering a more inclusive, adaptable, and innovative workforce, these platforms are not just responding to current economic trends but are actively shaping the future of global employment.

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