I'm not that negative about the whole sector but FLN is #4 in this space (below UPWK, FVRR and Toptal) and hasn't grown since 2016. Remember all those predictions that COVID would be good for FLN?
About AI: it's not good for FLN.
(1) A lot of people are just going to go straight to the AI, with no middle-man involved. The results are instant and cheaper than FLN.
(2) A pure-play "virtual AI assistant" startup doesn't need lots of employees in Sydney and Manila. Matt's pool of low-quality freelancers isn't a competitive moat here either.
There are over 6000 AI startups with collectively over $US10B in funding. If you were good at this stuff, why would you work for FLN? There isn't a single "regular employee" (a few Matt cronies from way back and Neil Katz has 0.2% or more) in the top 20 shareholders - suggesting that working for Matt will get you 0.1% of the company, tops. That's worth $A92K - signing bonuses are bigger.
(3) Then, even if you want a hybrid play and to follow the idea that "you need a freelancer to ride herd on the AIs" - why FLN and not its competitors? They've heard of AI, too.
In addition to your points about knowledge/skills, FLN doesn't have any money left for acquisitions or big technical developments. They're close to broke - negative working capital. A pure-play AI startup in this space with no track record would probably find it easier to attract funds than a "no growth since 2016" conglomerate (marketplace, Escrow, trucking) with a bad balance sheet and KMP pulling >$A1M per year out of the (already money losing) bottom line.
FLN Price at posting:
21.5¢ Sentiment: Sell Disclosure: Not Held
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