Why we invested in Passionfruit
TL;DR: Passionfruit’s exceptional, forward-looking founders are making freelance work not just a viable option, but a superior option for skilled professionals. By building a distinctive platform for loyal Gen Z freelancers to work, learn and earn, they are solving the talent crisis for individuals and companies alike, and building a category-defining business in a massive and growing market.
How it started
I first met Raffi Salama while studying at Cambridge University and then met Issah Abdul-Moomin as Raffi’s cofounder in September 2021. It was very early days for Passionfruit, but even then, I was struck by the drive and foresight that radiated off these two founders as they mapped out how to build their vision of the future of freelance work.
After learning more about the company they wanted to create, and seeing the uptake and organic growth that they experienced in just a few early months, we were determined to lead their $700k pre-seed round in December 2021.
Seven months later, we’re delighted to be co-leading their oversubscribed $3.6m seed round ($4.3m total), alongside firstminute Capital and a strong line up of other investors, including FJ Labs, Portfolio Ventures, and the Atomico, Accel and Notion scout networks. Angels Mandeep Singh (Trouva), Xav Collins (Turo), and execs from Stripe, Airbnb and Workday have invested too.
Here’s why we decided to back Passionfruit originally and are doubling down today.
The freelance market is vast and growing with the emergence of the Gen Z workforce
In the US, the freelance market is worth over $1tn annually. That’s 5% of the US economy. In the UK, the combined annual income of remote knowledge workers is £162bn. Highly skilled freelancers now make up 49% of the self-employed economy of 2.2m workers.
In the US, more of Gen Z already work freelance than in traditional employment, freelancers are getting paid more than normal workers, and freelancers’ attitudes have shifted to seeing freelance as an equal career opportunity.
It is clear that this market is now entering a second wave of growth, driven by key future of work trends.
Macro and micro-influencers, from New Zealand Prime Minister Jacinda Ardern, who backs a four day week, to the 19 million weekly active servers on Discord, are encouraging more and more white collar employees to wonder whether the office-based 9 to 5 (or later) is really their best option. Even if it is, they’re increasingly open to freelancing on the side for supplementary income.
But freelancing only works for a few
Despite this, freelancing is far from optimised. As Raffi and Issah discovered when they surveyed hundreds of young white collar professionals, it is something that many dream about doing. Ultimately, however, they are deterred by the financial and emotional barriers of leaving the structure, safety and camaraderie of a corporate job, where their work, pay and development is handled centrally.
New freelancers rarely have pre-existing networks that help them find work, or support structures that help them upskill and navigate administrative tasks. They spend at least 45% of their time trying to find new clients, managing administrative burdens and trying to upskill. An annual study by the US Freelancers Union and Upwork found that 81% of freelancers find freelance business skills are important to their work and would like additional training.
As a result, the overall pool of high-quality talent that is available to businesses is unnecessarily limited.
The solution: A freelancing platform for Gen Z
Passionfruit transforms the day-to-day experience of being a freelancer, ultimately becoming their digital home to work, learn and earn. Rather than hunting around for work, planning finances in Excel and feeling isolated, freelancers — or “specialists” as they’re called at Passionfruit — are sent briefs tailored to their skills and interests. They have insights into their annual earnings, and are part of a community through peer-driven mentorship programmes and training.
Although other online platforms for freelancers exist, they tend to focus on the demand side: the companies who need a freelancer. By prioritising the specialists — many of whom have not freelanced before, but are experts in their field — and showing them the earning potential and freedom of freelancing, Passionfruit attracts only the very best talent.
The demand side follows
This translates into great outcomes for clients. Portfolio companies from 65 of the world’s top 100 VC firms are now using the platform, and 80% of customers come from referrals and word of mouth. Specialists are matched with 93% of jobs in under 72 hours, on a flexible monthly rolling basis.
Marketing, which Passionfruit is focusing on initially, is currently structured around agency models. But there is a strong economic argument for dismantling the traditional cost structures that come with agencies (e.g. fixed salary and office costs) in favour of a distributed, flexible model. By cutting out the middlemen, the companies pay less for talent, and the freelancers earn significantly more. Win-win.
Companies’ alternative to the agency model is to go directly to a freelancer. But guaranteeing that the freelancer will produce quality work is a major challenge, and the administrative negotiation process is a drain for both parties. Passionfruit handles all of the administration and rate-setting, so freelancers and companies can focus on the work.
It guarantees quality by vetting specialists and only accepting the top 3%. In fact, this piece itself has been co-written with the awesome Pascale Hughes, a content writer who was able to go freelance full time because of Passionfruit.
A brand-led vision and a focus on community
Specialists benefit from being part of the Passionfruit community. There are upskilling opportunities, a growing knowledge network and operational support on invoicing and admin giving them all the benefits (career development, compensation and colleagues) of an agency with none of the drawbacks (bureaucracy, inflexible hours and locations, and toxic working cultures).
This, and Passionfruit’s distinctive brand identity — built with support from their excellent specialists — is a relatively intangible but incredibly powerful, defensible asset.
One of Raffi and Issah’s core strengths is brand and community building and we believe this is key to the success of the business.
Highly intelligent, driven, passionate founders
Raffi and Issah met on Sir Martin Sorrell’s highly selective WPP Fellowship programme. Since graduating from Cambridge and Oxford respectively, they’ve built direct industry experience and a deep ambition to build a category-defining business. Raffi became part of the launch team of David Beckham and Softbank’s new MLS franchise Inter Miami, while Issah became Corporate Development Director at Group M, the world’s largest media buying business.
Their experience in the marketing industry and in agencies gives us deep confidence in their understanding of the market and the problem they’re trying to solve. This is backed up by the extensive market research and product-market-fit work they’ve both led over the past year.
What comes next
Passionfruit will continue to add to the hundreds of specialists and customers from across the EU, UK and US that already use and love the platform. The plan is to grow the product offering and work with ever-larger businesses across Europe and North America. While the company’s initial focus has been marketing specialists, over time this will also expand into adjacent disciplines to meet customer demand.
A personal note
My experience working with Raffi and Issah over the past seven months epitomises why I love investing and working at the earliest pre-seed stages of startup building here at Playfair. On a business level, finding that delicate balance between setting clear macro-level strategic goals and diving into the micro-level detail is what the pre-seed stage is all about. The other half is all about people: being close enough as a founder-investor team that you can openly and genuinely talk about the inevitable issues and anxieties of being a pre-seed founder is priceless. I also believe it means you can solve them twice as effectively.
The added bonus from a relationship where as an investor you truly feel part of the team is that when the company reaches the lofty milestones you set together, the celebration is that much sweeter and deeper. I can’t wait to see what heights these two exceptional founders will hit over the next few years and I’m very lucky to be a trusted part of that journey.
. . .
If you’re a startup, scale-up or enterprise looking for high-quality, flexible marketing talent, you can reach out to the Passionfruit team directly here: email@example.com
If you’re a founder at the very earliest stages of building your company, I’d love to meet to debate and brainstorm your vision for the world. You can find me on LinkedIn here or pitch the wider team at Playfair here.