LinkedIn – Microsoft’s social network

Monday 01 March 2021

Portfolio insights

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The gig economy is large and growing rapidly. In 2019 it generated $250 billion worth of transactions according to research from MasterCard, and is expected to reach $455 billion by 2023. More than 60 million US workers now participate in the gig economy in some way, with the pandemic creating more white-collar freelance jobs as people and businesses embraced remote work.

Gig economy total transaction volume (USD billions)

Source: MasterCard, Swell estimates

LinkedIn has over 740 million active users, having added more than 60 million in the last 12 months, and we believe gig economy workers represent a large untapped opportunity.  Last week The Information revealed LinkedIn was developing a service for freelance workers called ‘Marketplaces’ to match white-collar freelancers with people and businesses in need of their services. Marketplaces is expected to launch in the second half of this year.

Hidden potential

LinkedIn has a number of revenue streams. Aside from advertising, it sells premium subscriptions for job seekers and salespeople as well as services for recruiters and HR personnel. We also see potential for it to expand its education and training services into new verticals and to unlock value by facilitating B2B connections. 

While LinkedIn generated $8 billion in sales last year it was Microsoft’s sixth largest segment overall behind larger businesses such as the cloud, productivity suite and gaming which are performing exceedingly well. LinkedIn is often overlooked in assessing the company’s value and is underappreciated by the market.

About the Author
Swell Investment Team

Swell Investment Team

Members of the investment team contributed to this article.