The future of work: empowering independent workers

Andrea Di Pietrantonio
8 min readApr 4, 2019

The future of work is an immense topic encompassing different smaller trends, from education to admin, accounting, insurance and social security. HR-tech innovation in the way corporates and SMEs work is a very interesting topic, recently covered by a good analysis by Atomico. In the following overview I look at this space from a slightly different angle to focus on gig/freelance economy and its evolution and growth trends. The choice is driven by a combination micro-trends (new technologies, UXs and marketplaces emerging) and macro-trends on a society level combined with a sizeable TAM (Total Addressable Market). In the most optimistic projections (Upwork, Freelancing in America 2017), the number of freelance workers is expected to surpass the number of non-freelancers by 2026 in the US. A segment of roughly 57M people in 2017, mostly composed of millennials workers. A growth trend not easy to ignore.

The discussion I want to kickstart here comes from a pure VC point of view, with the main question being “what technologies will enable workers in the future and how?” (read: “where are the most interesting areas to invest in?”).

To answer those questions, I tried to first define what categories of workers I should be looking at, what defines them and what kind of tech platforms they have in use today. Platforms listed below include different e-commerce and marketplace business models, all driven by a strong focus on the end user and innovative UX.

Gig and/or freelance economy itself, is a loosely defined market segment including a few different types of workers. For the sake of simplicity, I have been using the “independent workers” umbrella to include both gig economy and freelancers, as well as a few other categories.

Independent workers, as defined by McKinsey Global Institute 2016 research, are characterised by three main features:

  1. a high degree of autonomy,
  2. payment by task, assignment or sale,
  3. and, a short term relationship between worker / client.

The definition includes both people who provide labour services as well as those who sell goods or rent assets.

Taking one further step; the independent worker category can then be divided into four main segments depending on the motivation driving them to do the work (primary or supplemental income) and the impact they have on the career choice (preferred or necessary).

A quick look at the breakdown of the workers’ motivations in both US and EU highlights a market mostly driven by independent workers doing the job by choice and mostly using independent work as an additional source of income.

Overall, we are looking at roughly 162 Million of workers in the US and EU 15, a group representing roughly 20–30% of current working age population in the area and expanding quickly. These workers differ from permanent workers in the way they find, execute, retain and get paid for a job. We are looking at workers who sell labor, goods or lease assets approaching a job market with little to none infrastructure to support them.

Next, we will go through an overview of two generations of tech platforms for individual workers. The first one, that facilitated the growth of the market by creating an online access, is already a couple of decades old. The second one, focused on supporting workers’ needs in the long term, has a more recent history.

Generation 1: creating the market

The first signs of tech-based infrastructure targeted to support specifically their needs, emerged with what could be defined as “Generation 1” platforms (Uber, AirBnB, UpWorks, Etsy, Coursera and many more).

The first wave of digitalisation in this market tried to facilitate access to market for independent workers. Since late 1990s’/early 2000s´, platforms have emerged to facilitate freelance work, provide labor (delivery, transport, service), sales of goods and leasing assets.

Those platforms are part of a consolidated, and well-funded, market trend including many of the most media relevant unicorns we know today, from Uber to Just Eat, AirBnB and Etsy.

The chart below gives us a good overview of some of the main players in the markets and their focus. It is worth considering, especially from the point of view of a European VC, that most of Generation 1’s platform are US based companies.

Generation 2: supporting the workers in the long term

While generation 1 platform have provided access to jobs, we are now observing a second wave of technology “disruption” trying to impact the stability of the market by improving the workers’ conditions, their access to finance, insurance and facilitating the way they manage the business.

Generation 2 platforms (companies such as AndCo, Safety Wing, Coconut, Oxygen, Expensify) tend to target the needs of the independent worker who has already accessed the market and is now trying to manage every day’s work and long term business. These companies focus on

  1. different type of insurance for individual workers
  2. facilitating easiness of doing business (from umbrella companies to invoice management and taxation support)
  3. facilitating access to finance both from a professional and personal prospective.


In this segment, we have seen a good number of health or work related insurance companies for independent workers with both fixed or “pay-as-you-work” solutions (very interesting model tailored exactly for the flexible needs of independent workers). From a market expansion point of view, however, these companies risk incurring in a high CAC and low LTV as they find themselves targeting a B2C market alongside insurance incumbents. Furthermore, with over 50% of independent workers recurring to this kind of employment for supplemental income, many of them might often be already insured or might be able to extend an existing insurance they have.

Easiness of doing business

The second macro area to take into account is the one of platforms facilitating easiness of doing business. Invoice management has long been in the market with companies often focusing solely on their local market and on one or two specific services. Similarly, umbrella companies have been a popular tool to facilitate the billing and taxation process of the individual workers. However, especially in the EU, these business models, often suffer from the limitations of a fragmented market as it becomes quite costly to expand compliance from one country to another. Furthermore, especially for the more mobile freelancers, both umbrella companies and invoice management solutions might fall short in fully managing the taxation process, especially in case of cross-border transactions.

An often untouched issue in this space is maternity and paternity leave. While the monetary aspect will most likely fall within the insurance or access to finance category, sharing clients within your network and being able to take a break and resume the work relationship after child leave is an unsolved pain point for most independent workers. Transitioning from a full time commitment to a long leave and back might mean losing a big part of the client’s base for the independent worker and having to start again from scratch.

Overall, facilitating business includes both de-cluttering and streamlining of admin and accounting processes as well as marketplaces brokering collaboration and cross-pollination across independent workers. These two areas could very much become part of the same platform streamlining workers’ professional life in the future. Finally, as kindly commented by Allan Martinson, CEO of LeapIn, it is worth to notice that the classification of different platforms and service providers is becoming increasingly difficult as the boundaries between the categories are becoming blurred.

Access to finance

Finally, access to finance both personally and professionally, has attracted a good amount of venture capital in Europe and the US. With the lines between personal life and work becoming more blurred, financing has become a major pain point for independent workers. Access to finance is a broad market segment, here we only consider it from the point of view of independent workers. In the long term, however, services targeting independent workers might very well expand to the rest of the population and vice-versa.

The traditional finance market is not geared to service independent workers with invoice factoring, credit lines or business loans given their non-linear earning curve. Contextually, accounting, receipt management and admin, which have always been painful cost centres for organisations, became even more burdensome when it is only one person or two to manage those issue on the side of finding and executing work.

When it comes to personal finance, we look at a typical millennial market. Young adults with limited access to loans, mortgages, efficient savings and retirements plans as they do not fit within the traditional workforce framework from a bank perspective. Generation 2 platforms emerged by looking at new data points and UX to attract this market and service it with new products that would otherwise be overly expensive.

Similarly to the insurance provider, however, these companies find themselves competing in a B2C market crowded with cash reach incumbents. Distribution, CAC and retention are major issues for the players in this space.

So, what is exciting?

This overview is only scratching the surface of many new business models and UX emerging in the market. The limitations mentioned in the Generation 2 overview can be overcome and I would be curious to explore how new companies are tackling those issues (hint:

We have been exploring the market but I’m sure we’ve missed 1000s of companies working on this and we’d love to get to know them more. Who is missing from this list in your opinion?

We look forward to investigate further some promising verticals in this space, such as:

  1. New ways to aggregate independent workers and facilitate collaborations
  2. New distribution channels for services targeted to independent workers: one-portal-rules it all, workers’ services marketplaces or vertical platforms
  3. Cross-border services removing layers of bureaucracy for the independent workers (admin, accounting, expenses, taxation)

From our side, we tried to imagine what models could prove successful in the future and we are left with more questions than answers. Would a holistic platform providing easy access to work as well as finance for independent workers succeed? Should insurance, pension and personal finance be bundled in one unique macro platform or should we build several niche verticals? Is it ethical to look at new type of data-points (social media data, behaviour, etc) to allow an independent worker to obtain a mortgage she would not be approved for otherwise?

If you have or think of having an answer, I am happy to discuss and hear your thoughts!

Special thanks to my colleagues Ekaterina, Linus, Lauri and LeapIn’s CEO, Allan Martinson for their feedback during the preparation of this post.