The acquisition was funded through a placement of AUD 10 million about usd 7.8 million) in ordinary shares of Freelancer.com to institutional investors. As its name suggests, Escrow.com provides online escrow services for ecommerce websites by holding payments for goods or services until a transaction is successfully completed.
Its commercial partners include eBay, GoDaddy, AutoTrader.com, and Flippa.com. Escrow.com was founded in 1999 by Fidelity National Financial, then merged with iLumin in 2002 before being purchased by an unnamed private investor in 2004. Freelancer.com said it will acquire Escrow.com from the same investor. In a prepared statement, Freelancer.com chief executive Matt Barrie said that the acquisition will allow Freelancer.com’s 15 million users to make more secure payments.
Freelancer.com already has a version of escrow services called Milestone Payments, which means the website holds funds from an employer until it is released to a freelancer following the completion of a service or a dispute resolution. The Milestone Payments system, however, is the frequent target of complaints from both employers and freelancers who claim that payments aren’t issued in a timely manner and that the system doesn’t provide adequate protection against bad jobs. The acquisition of Escrow.com may help Freelancer.com solve some of these issues.
Escrow.com claims that in fiscal year 2014 its gross payment volume was USD 265 million, and that it has processed over USD 2.2 billion in transactions to date.
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