Freelancer Ltd
ASX:FLN
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Freelancer Ltd
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[Audio Gap] In terms of headwind, appreciated by 8.8% for the quarter as it went from 0.6567 to 0.7149. If we go down to the segment results, as I've said a few minutes ago, gross marketplace volume, which is the payments to the freelancers in -- for the Freelancer marketplace continues to get all-time highs, record highs. In the third quarter of '20, the GMV was $25.5 million, up 16.9% on pcp. The gross payment volume, which is the payments into the marketplace plus revenue, so it's GMV's payments out GPV's payments in, was the second highest on record after the second quarter at $48.4 million, up 6.1% on PCP, or USD 34.1 million, up 11.5% on pcp. You can see here from the graph, which is showing multiyear gross marketplace volume that we had a big uptick in 2020, and it continues to grow and this is contributed to by a few things. Obviously, we're in a favorable environment in terms of the tailwinds, but we've also made quite a number of significant product improvements. And we've really had a big focus in the last 12 months on quality and product execution, and we've done some pretty good things across the board there. In the third quarter, we had -- web traffic to the site was up 31% to 36 million page views, up 88 -- sorry, web traffic sessions up 30.8% to 36 million. Page views were up 88% year-on-year to 312 million. This resulted in 2.07 million new registered users in the third quarter, up 80% on pcp. And similarly, jobs posted, and these are jobs posted where we've removed the spam and test projects and other work projects and so forth, were 657,000 in the third quarter, up 19.1% on pcp. In terms of labor, we actually continued to be the world's largest marketplace for freelancer talent by a very large margin. Overall order of magnitude at this time of writing, the total number of registered users has ticked over 48 million. And shortly, we'll experience our 50-million-user event so we should just marketing around that. In the first half of '20 report, we talked about how the marketplace responded to this big growth in user sign-ups. And it was a combination of what we call rookie clients and also rookie freelancers. And so rookie clients are those that have never posted a job before, and rookie freelancers are those who have never want a job before. We had a big influx of people looking for work, people looking to hire people, obviously due to COVID and so forth, plus the product improvements. And that led to the average project size -- average completed project size dropping from USD 216 to USD 161. Now what's happening here is rookie clients tend to spend less on their first project, and over time, as they build familiarity with the website, they spend more. By the end of the third quarter, the average completed project size had lifted by about $10 to $172. So we do expect that to lift again in the quarterly report, which I'll probably switch to now. I'll just show there's a graph here, which will show you -- show you this. We can see in the -- you can see with the big spike up in completed projects, and that led to a spike down in the average project size. Now you can see that over the long-term trend line, this goes back about 16 years, you can see the average trend -- or the trend for average completed project size is up over time. So we do expect this to continue back up, it's just that we had a big influx of both talent and rookie employers that typically spend a little bit less when they get going. They can see that the GMV is very strong, it's -- and continues to rise. I think that we've set a new base here in terms of -- there's a step change, I think, in terms of usage of the site and cash coming to the business and deposits, physical money coming in to the balance sheet. And in terms of supply or the labor, the monthly active bidding users peaked in about April and July. It was 2 peaks in terms of the talent. But it's about up 70% from January, January 6. And the number of monthly rolling 28 days active bidding users is up 39.8% from January to September. And it's just going to come off a slight amount in September, October because of the summer period in the Northern Hemisphere, which is seasonal. And it's starting to trend up again now as we speak. So we expect a trend off in the stats from here to the end of the year as we traditionally have seen, plus we've got a number of really good product improvements that we're making, which we'll continue to sort of -- [ I'll talk about it ] in a second. One of the big product improvements, as you can see in these 4 graphs, it might be a little bit small.
I'm just on a conference call, can I give you a call and see? Okay, I'll give a call back and see.
Where did that come from? So as you can see this, in terms of hourly projects, we've actually made some improvements to the hourly funnel. In 2019, as we migrated to the new single page architecture or the webapp architecture that we'll talk about later here, which is really a major overhaul at the front end of the website to make it really fast, responsive so it works on mobile, so we can deprecate the legacy mobile website. But also overall, provide a much better experience to users. It'll be like Facebook. So when you click around, the pages are instantly loading and conversions go up, et cetera. We've been really working through that in a big way, plus we really put a big focus in the last 2 quarters on the UI improvements in the hourly funnel, fixing up a whole bunch of little bits and pieces, not just on the desktop side, but also across the time tracker. And you can see here in our stats in terms of payments into milestones for hourly projects as well as hours tracked, we've gone back to the long-term growth numbers, which are quite rapid. So we think this -- things will continue to grow from here, and it's great that we've finally fixed this funnel. We've got a few things to fix up in the fixed price funnel still, but milestone value in U.S. dollars is up 26.5% in the third quarter on pcp, and we expect that to continue to grow in fine quarters. In terms of contests, which is another way of getting work done. I mean this is just going gangbusters. In fact, in many ways, it's a victim of own success. I mean the average number of entries per contest now is over 230. And you can get contests for as cheap as $10. And I've talked about in previous quarters how I posted a contest for $10 to get some business cards done, I've got 430 entries in that contest. It's nowhere in the world there is as liquid as our marketplace for labor, and contest is certainly a big -- can show off in a big way. And I encourage you, if you haven't tried using our contest on Freelancer to do so, you can do it in any of the 1,800 categories. So it doesn't just have to be design work. But it's very iterative in nature, you got to say, I like this, I don't like this, what have you. We've done a contest in recent periods where we said just simply go around your local area, pick up some rubbish and upload some videos and some photos. And we had thousands of people can -- participating in that. So it's an incredible way to marshal talent and get things done. It's being used right through from consumers right up to enterprise. So with an example here, Philip Morris in the quarter posted a USD 20,000 contest to source ideas to automate grocery retail checkout processes. On average, 82% of contest is now getting entry within the first hour. You can see here that those stats are trending up very, very strongly. And we get over 1.2 million entries a month, which is up 36% on pcp, and that's just taking off. So contests in terms of supply, in terms of liquidity is unparalleled, and there is nowhere on the planet that is as liquid as we are in these online contests. And I encourage you to go out and do your own research there, but it's absolutely phenomenal, what's happening there. In terms of some other things that were happening in the quarter, in terms of dynamics. Obviously, we operate in a complex system. If you believe Marc Andreessen's thesis that software is eating the world and every industry is becoming a software business. So the largest telephone company in the world probably today is Zoom, which we're using now, which is a software business. And the largest shoe seller in the world is a software business, which is Amazon. The way we kind of think about ourselves is we're probably one of the firsts in software. We have a GDP, which ranks about 183 out of 187 countries in the world. If we were a country, we have labor force, we have employers and businesses posting jobs. We make decisions on a daily basis around should we lift minimum wage here or there. We have a rudimentary financial system, which is in 38, 39 currencies or so. We have an arbitrary -- we have a fairly basic legal system in terms of arbitration and dispute resolution. And we have a police force in terms of the support team and in terms of the people reporting violations in the community and so forth. So it really is a complex and dynamic system. And so you have to be kind of careful with very much how you modify use behavior here. And one of the things we've been doing is -- one of the biggest feedbacks we get from employers or job posters on a site is freelancers are bidding very, very quickly, which is great in terms of liquidity. It shows them straight away, particularly the new user, there really is this eureka moment where you post your project and boom, 80 bids come in and you go, wow, this can't be real, are there really 80 people wanting to do my job and they've come over in minutes. And I've seen projects now with thousands and thousands of bids on them. So I mean, it's an incredible resource for marshaling talent. But sometimes these bids come in quickly and the freelancer is cutting and pasting their bid on, not reading the proposal properly and not submitting a high-quality bid. So we've cracked down in 2019 on this, and we implemented some software and some operational processes to crack down on low-quality bids. And what we do effectively is we have a combination of algorithms and basically effective machine learning, detecting poor quality bids and they get flagged up to an operational team that will then apply a penalty in. The penalty that we typically apply here is an exponential backoff. So the first time you get hit, you get a 5-minute time out. You get an explanation about what's bad about your bid and how you can improve it and some links to some guides and so forth. And then after that 5-minute time, you can continue bidding again. And the second time you get hit is a 20-minute time out, third time it's 80-minute time out, and it just keeps going exponentially. And eventually, the freelancers get the picture and actually start providing quality bids. Now that's great and it has had a fantastic effect on quality. The freelancers are taking their time now to -- even though we've got liquidity to continue to grow, I mean, the freelancers are taking more time to think about their bids and write high-quality bids. The effects of this, however, in the marketplace. And I thought I'd highlight this just to show you an example of the complexity of running this business is that the highest bidders used to be those -- the power users. And that makes sense, right, because the power user have built up profiles over time with thousands and thousands of feedbacks. They're the ones in the highest-level plans. They have a lot of bids. They are the ones -- in a way, we want bidding, but we want them to actually write good quality bids rather than spraying bids out. But when you're top of the ranks, you can be a little bit lazy. And in some of the organizations, you might have a dedicated bidder who will write high-quality proposal. But in others, you might get some freelancers who were just sitting there just putting bids on everything. And so the response -- cracking down on effectively bid spam was that a number of these higher level freelancers basically got hit because they're putting more bids on and so forth. And a number of these freelancers actually downgraded their plans. And so the ratio of bids in the marketplace by membership, we saw the Premier plans dropped from 37% to 20% in terms of the ratio. Now that makes sense because we actually have -- and the scheme of things out of 48 million people, we have a relatively small number of people in the higher-end plans, right? So they shouldn't really be above 35% of all bids in the marketplace. But when we -- it would be great to have 48 million people on plan. So even if we had 48 million people on $1 plan, we would be making $48 million a month in the U.S., right? So obviously, it'd be great to get more and more people onto plans. But we did see the ratio of bids in the marketplace dropping 37% to 20% from those higher plans. And effectively, also some people in the higher plans also downgraded to some lower plans. And at the same time, we were seeing a large influx of freelancers coming to the marketplace. And this is actually even before COVID. Last year, I think we had about 9 million new sign-ups into the marketplace. And we get now about between 20,000 and 40,000 new customers a day signing up. So it's a pretty phenomenal level of sign-ups. And because we've got this influx of people bidding on projects and so forth, the ratio of bids coming in on the Freelancer actually went up from 20% to about 35%, which makes sense, and it should be about that level, even though we're trying to get more and more people in the plans at the time. But the flip side of this is that new freelancers are the least reliable to complete a project. They are the ones that don't have a track record they're trying to protect, that don't understand fully how the site works and they're new to it, et cetera, and maybe least committed to actually getting a job done. So what we actually saw there in terms of the flip side of this is we have a business model around the project fees, which we think is a great model for attracting people to the site. We basically say it's free to sign up, free to bid on projects and we deliver your commission to you of 10% when you win the project. But we actually let the freelancer pay that commission up to 90 days after the commission has been levied. So it's a chance for someone who doesn't have any money to get on the site, who needs money, who might be talented that can't afford right now to pay a project commission upfront before they complete the project. And particularly, if you're a first time user, you might be a little uncertain about whether you're going to be paid ultimately, if this whole concept is new to you. And so -- because we had a big influx of new freelancers and we have the proportion of bids being won by new freelancers went up, we had an increase in expired fees 90 days later for some -- from freelancers that -- it could be a combination of things, the freelancer might be unreliable, they might have not completed the project on time, they may not completed up to spec or the employer might have been -- the job poster might have been new to the site as well and maybe take it off their interest in completing the project. But the expired fees has been rising and did rise over the first half of this year. It peaked at about USD 300,000 a month of expired fees, which obviously is a number we want to bring down. We have brought it down a little bit with some improvements we've done so far. But we want to really, really bring this down now, and that's going to be our focus for the next quarter and a bit. And so you have to kind of be careful when you make modification in the marketplace to avoid, my new favorite word, which is schlimmbesserung, which is basically making things worse in an effort to improve. Now we do think net-net, we've made an improvement here with the spam, and we do know how we're going to reduce these expired fees. We're going to do a number of things. One thing we're going to do is we've got to tighten our payment verification for freelancers. So some freelances will be required to payment verify before they can bid. The second is we're going to gently collaborate the free plan offering to encourage more people on paid memberships. As I said before, it would be great if we could get even a fraction of the 48 million on -- many, many millions on even a $1 plan because that would be a big -- a great recurring monthly revenue. Third is we're going to also lift the trust and safety parameters on accounts before they're allowed to bid. So there's things like they already have to be e-mail verified, but we might require them to fund verify. We can [indiscernible] regions we already require them to be KYC or ID verified. We might roll out to more regions. There are a bunch of other trust factors we could look at. For example, address verifying and so on. And then finally, we're going to require the high-value projects, can I be bid on by those in the Verified by Freelancer program, which is a program whereby we go through and we interview the freelancers in depth about their skills, experience, et cetera, make sure they're committed and so forth before giving them a badge or the Preferred Freelancer Program, which are our elite freelancers. So that's just a little side note there. Obviously, if we can stamp that out and get that down. Some of that in terms of expired fees will be rookie job posters -- posting projects for silly amounts, like maybe $1 million that get awarded and so forth and then if it gets levied, then it gets expired, but a very, very small number of that. But for the most part, we should able to capture at least half of this into actual revenue, which will be a good boost to the bottom line and so forth as well as getting marketplace conversion factors all up. One really big improvement that I've been talking about for a couple of quarters, and we've delivered on, and we continue to deliver on is around mobile. And we've been paying off a lot of technical debt over the last couple of years. And this is -- we're really in the home streak now in terms of the major work items. And with the improvements at the front end interface that we've made, we can now -- we're now in a position to tackle mobile in a big way. And the first thing we did was with the new webapp responsive website. We ripped out the legacy mobile website, I think it was about June. And since we've ripped that out, so now we use the mobile web experience, it's exactly the same codebase as a different -- so was it June? Do you remember when we...
July.
July?
Early July.
Early July. So since we've ripped that out, project fees actually in the mobile web have actually been up 54.8% in pcp in the third quarter, and overall fees are up 57.6% on pcp. And what's happening here is that before we had a dedicated team on a separate website, which is the old way of doing mobile. It was never had feature parity in any way, shape or form. It was a very, very poor cousin to the desktop site. It was hard -- It's hard to keep it up to date. You couldn't run AB tests on it like you're doing on the desktop site. It was always dragging in feature compatibility, and it was just a terrible experience. And we've finally managed to rip that out, and we've seen a big uplift in terms of revenue being generated from that. Now the next big thing that's happening imminently is we're ripping out both the iOS and the Android apps and replace them with the same codebase wrapped in a capacitive framework. And we are literally in the middle of alpha testing on that. And we're going to beta testing, Adam?
About a week's time.
About a week's time from now. And so it's going to go to the -- some internal beta testers like the Preferred Freelancer Program and the Verified Program and have access to the early access features. But imminently and certainly before the end of the year, iOS and Android, we ripped out and replaced by fantastic new apps which have full functionality, same codebase will be lockstep because it's the same codebase with the desktop site. And instead of having 4 separate teams working on 4 separate codebases, there's 1 team, 1 dream. And so this will do a few things. One is it's going to lift the revenue from iOS and Android, and we hope to see rates like we're seeing with mobile web. It's going to mean that the productivity of the engineers is a lot faster because we don't have 4 teams trying to do the same thing. And the overall experience to the customers is going to be a lot better and it's going to be great. So as new features come into the desktop website, they're available everywhere. So that's been a huge amount of work to get us to this point, and I'm glad to say that in 1 week from now, we will have better customers from our freelancers and our job posters using those apps and going through them. So that's a huge amount of technical debt. And from here, one of the big focus is now on design. So we're going to get the design fantastic. And we have a world-class design team run by Michael Strelan who came from Foxtel. He posts a bunch of people from Foxtel. He brought in some other great designers, and we've got some really, really good things they're going to start being deployed now that we've gone through a lot of the highly technical and engineering-focused technical debt. We can now put the luxury to start looking at the actual design, technical debt and getting that in a good place. Some other things we did in the quarter is we launched Discovery -- Freelancer Discover, which is a way to showcase content. There's a lot that's going to come here. This is really 1 step of 100 steps down the showcase direction. So there's a lot more to come in the future. We also did a lot of things around field services. In particular, I don't know if any of you were aware of Freelancer Global Fleet. If you go to www.freelancer.com/globalfleet, we have an enterprise offering of our field services solution. But we've been really, really upgrading the platform in terms of being able to do freelance jobs, which are required in a physical location. So things like delivery, shipping, home moving and so forth, send me a photographer out to a location, even sending someone I need to in a location. And so we've done a lot around that interface. And a lot of -- a lot has been demanded by our enterprise customers. And I'll talk about enterprise in a second. But Global Fleet is effectively our enterprise version of field services. We've also been doing a little work in the API around location-based work. And then very shortly, we're going to release a stand-alone app, showing the power of the Freelancer marketplace, coupled with an API where we abstract away from the marketplace, and we effectively deliver an Uber for X and this is pretty amazing. The app we're delivering does not exist at the moment anywhere in the world, and we uniquely are positioned to offer it because we have people literally everywhere in all sorts of different skills. And no one else really deliver what we're doing here. So it's really going to show off the power of what you can do. If you abstract away from the marketplace and you have a stand-alone app, just working by API. In terms of enterprise, and I may remind you, we do have Sarah Tang, who is available for Q&A at the end of this call, who can answer any questions you might have. But we made great progress with enterprise this quarter. We certainly have a lot of work to do in enterprise, and it keeps getting -- keeps building up. Some of the things that's point of note in terms of what we achieved in the quarter is we rolled out a record number of pilots, including a pilot with an American multinational food company, a $70 billion American technology company, a $26 billion telecommunications company, one of Australia's latest retailers, 2 of India's largest conglomerates and a multinational conglomerate and another in technology space. We've got a number of pilots that we've completed last quarter, and we're actually now expanding and one includes an accelerated rollout for a $17 billion chemical company. I've talked about Global Fleet. This has actually been already parted with enterprise customers. This basically is in partnership with Routable AI, which is some guys at Uber, who actually have a better routing algorithm that Uber has internally. And Freelancer Global Fleet basically enables enterprises building and operator of global fleets of professional services talent to deliver expertise anywhere in the world on-demand. And so it's designed for on-demand platforms, such as fleet delivery platforms, fleet management companies, logistics firms, other large enterprise infrastructure, energy and technology. And basically, rather than you going out there and hiring a whole bunch of people and putting them on a pink bike with a pink hat and a pink T-shirt and running around, for example, delivery infrastructure, you can make an API call to the cloud. We already have the people everywhere. They already -- we already know who's good and who's bad. We've got them all rated and reviewed. We know where they are in real-time. We can send them out for you on-demand. And so it really -- it's like Twilio for people, right? And so we partnered with Routable AI, which I mentioned before, people out of Uber. Some pretty, pretty senior people at Uber, and we cover it with the largest network of freelancers in the world with their leading on-demand vehicle routing and management platform. And what they let you do is they let you basically route the workforce, they can share routes, they can pull routes. And basically, with the 2 of us combined, you can scale up them in demand, tapping into 48 million freelancers in 1,800 skills. And we piloted this with a U.S. computer company, providing field services to computer and printer repairs in Indonesia. I've talked about in the previous quarter how that was successful and going out to multiple countries. We start the next country in 2 weeks, which is India. And imminently after that, the third country is already scheduled, which is Australia. And that's going to happen end of this year, beginning of next year. And there's 13 countries targeted here. And Indonesia is still running, even though we completed the pilot. It's still running because what we're doing effectively is a global rollout in 13 countries. And so we're doing everything we can to make this successful. And the GMV that we've been providing in total from here is going to be -- if we're successful, this will be material to the Freelancer GMV in a fairly substantial way. We're in the process of integrating with the ERP systems to automate the workflow for the field engineers at scale. And it's pretty amazing. There's a video of this on freelancer.com/globalfleet, just gives you a bit of a hint of kind of what's going on. Unfortunately, I can't mention the company's name at this point, but they're a pretty substantial company globally. In terms of Deloitte. The Deloitte engagement continues to grow at a great pace. We've actually -- I just want to note the scope of work to focus on not just the internal Deloitte to Deloitte hiring, but Deloitte to freelancers to the cloud. We have a public quote, which we published from the Chief Innovation Officer from Deloitte Consulting U.S.A., who said that success for us is 20% of all U.S. consulting gigs going internally Deloitte to Deloitte and 10% of all U.S. consulting gigs going from Deloitte to the cloud. And so this is pretty phenomenal considering Deloitte is the biggest Big 4, and Deloitte U.S.A. is the biggest part of Deloitte. So it continues to scale, and we've done over 90,000 to 100,000 hours now in Deloitte to Deloitte internally and about 20,000 consultants are on-boarded on the way to 52,000. So they're very committed to 52,000 being on-boarded. So not even halfway yet in terms of the number of Deloitte consultants that we're committed to put on the platform. And that's just stage 1. There's a stage 2, which is actually multiples of that. In the quarter, we also won RFP with $100 billion medical equipment and services company from one of our largest competitors. That's why this is particularly pleasing. One of our competitors had this account for 3 years, and we won it off them. And they're our biggest competitor. And we also closed a bunch of additional MSAs with places such as European and Asian universities and plenty of other. Our landmark deal, however, in the quarter was closing an MSA with one of the world's largest technology companies that provides hardware, software and cloud-based services and cognitive computing. They have said that success for them is 100,000 projects in the relatively short to medium term. So that's going at speed. And then on top of that, we announced a partnership with Facebook and Coursera. And what's happening here is, effectively, Facebook can't grow fast enough because there are not enough professionals that are skilled in the Facebook APIs and other bits and pieces that they need to be able to grow things like the ad program, their marketing programs and so forth. So what they've done is they've launched a bunch of courses on Coursera. And they're posting a bunch of jobs into our marketplace for the graduates of those programs. And that's coming from the Facebook basically ad sales teams and marketing teams and so forth. And there are a bunch of clients on top of that, who use Facebook, who are also posting projects into our marketplace, including Johnson & Johnson. And so as part of this, we're basically co-curating with Facebook and a community of Facebook certified professionals. And we have a special section where they can communicate with each other and be trained and so on. And we'll continue to be doing this with other partners. I talked about in June how we jointly won a $25 million NASA Open Innovation Series 2 tender. The task orders have started coming in, and we started bidding on those task orders. I wanted to point out that the $25 million pool is actually -- that share aren't -- the winners is actually tender fees, and that does not include the GMV for projects posted or contest posted. So the money awarded to Freelancer is actually on top of that. So there's a lot happening. In fact, there's another e-mail that came through this morning with more task orders from NASA. So we're bidding on that, and we'll keep the market in performance as we go on there, but there's obviously a much deeper relationship with NASA. And to date, they've had 13,000 designs for products submitted by 6,000 freelancers and that continues to grow, and we continue to deepen our relationship. And on top of that, we're also building a customer advisory board with executives from bunch of these top customers to guide our enterprise product and innovation road map. So that's Freelancer Enterprise, with the exception of we have a custom Freelancer Enterprise substantiation that we're reporting across to, which is Freightlancer, which is Freelancer Enterprise for Freight. We've talked about this company many times in the past. But really, the big focus for it right now is putting across the enterprise stack. So again, it will be 1 team, 1 dream. And we've got some sneak previews of what it looks like where you've got to customize, post jobs page for freight, which we've actually -- we're utilizing the customer fields functionality that we built for Deloitte to basically allow customer fields for this particular page for the freight instantiation. We like freight because the average project size in freight is $4,500. And you can see there that this page, it's been customized and it gives you a feeling for what's going to happen in the future. And so Freightlancer will be running off the Freelancer Enterprise codebase just like Arrow is, just like Deloitte is and just like a bunch of other customers will be in the future. We can talk about them. And so we hope it to be a category killer in the area of freight, where we layer on a professional network of tough truck drivers with a 48 million freelancers doing metro point-to-point delivery. So anything you want delivered, we'll have all the people. I mean Uber -- last time I checked, Uber had 6 million drivers. It might be a little bit higher than that now. We have 48 million freelancers. We probably have more drivers than Uber does. So theoretically, you build Uber on top of Freelancer if you had a great API and a great way of doing things, we're working very hard to kind of make that a reality. And certainly, with the work on classification laws and the way it's heading around the world with the various supreme courts and FERC commissions and so forth, that may be in the future that companies like Uber need to come to us to source talent, just like the large companies of the world go-to Adecco, Randstat, PERSOLKELLY, KellyOCG recruit and so forth to hire contingent labor. Switching gears a little bit and going across to Escrow.com. We had a great quarter for Escrow.com and more to come. We achieved gross payment volume of $164.9 million, up 8.4% on pcp in Australian dollars. In U.S. dollars, which is actually the currency that the site operates in, it's $117.9 million, up 12.9% on pcp. We're primarily U.S. dollars, Canadian dollars, Australian dollars and pounds, but U.S. dollars still is by far I think 85% of the volume is at right now?
Yes.
Ex China, Escrow GPV was an all-time record at USD 108.4 million. You can see there's a 20-year history of GPV, and we're certainly at trend, if not slightly above trend in the 20-year trend line. And there's a lot coming. And some of these exciting things are happening as we've won eBay Motors, U.S.A., and we've talked about that in the past. That's integrated into both the website and mobile apps, et cetera, and it's the first and only digital payment option in the eBay Motors app. It's an optional payment method for now in private party listings. And so there's a bunch of consumer education that needs to be done around why you would use a payment system to buy a car as opposed to try and meet someone in person and pay them cash or give them a check and so forth. There's obviously a lot of danger in shipping a car across 1 side of the country to the other. And the first transaction we successfully performed at eBay Motors is a 1931 Ford Model A pictured here. That's actually the purchaser. Actually, I think it's the seller actually. The seller, it went from New Jersey to Poway, California. And so it's integrated in a deep integration with eBay Motors. But on top of that, and we just put an announcement out yesterday, this is going live. We're now in eBay Watches, U.S.A. And so effectively now, we're doing a couple of things. And the main thing we're doing is we're securing a new Authenticity Guarantee, which is live on the eBay U.S.A. website. You'll need to set your IP address to be from the U.S.A. to see this. If you -- maybe a little bit of a VPN, if you're not in the U.S. But effectively, it's a deep integration. And what happens now is no longer will you as a seller of a watch on eBay, will you be able to send your watch directly to the buyer if your watch is $10,000 or more, right? And so what's happening here is that the watch now gets sent to an authenticated network and the authenticated network, which has been set up by eBay, not by us, will look at the watch, pull a part, check everything, make sure that all parts are not fake. It will then put a stamp on it or sticker on it and provide you with a certificate, put it in a box and send it to you. All this time, the money is held in Escrow.com in escrow. You will receive your watch, you'll be able to be inspect it, look at the certificate, look at the sticker and so forth. And then you could decide to release the funds. Or if you're not happy, you can return it within the inspection period and get your money back, right? This is a phenomenal experience. In the past, what you had to do was you had to figure out, do I send my money first or do they send the watch first. Typically, you do send your money first. And if you got the watch and there was a problem, you had to fill in an insurance claiming form. Was it correctly as described? Was it within the limits? Did you follow the procedures properly? And it was a complete mess, right? So this is a phenomenal experience that's going to completely stamp out fraud on eBay and eBay Watches. It's compulsory for $10,000 watches and above. It's optional for $2,000 watches and above. And there's 2 options you have for $2,000 and above. One option is you can actually use Escrow.com as a payment method independently of the Authenticity Guarantee. The other option is you can use the Authenticity Guarantee, of which we're the only payment method, we're the exclusive payment method. So there's a couple of different options there. It went live last night in the U.S. We already have transactions that have been set up and agreed to by the buyer and seller and is waiting for money to be sent through. In fact, I haven't checked this morning, maybe some money has come in, I don't know. But it's ramping up through the power sellers as we speak. So over the next 2 weeks is a bit of a soft launch as it goes to the power sellers. And that goes to basically all sellers. And as I said before, the big difference between eBay Motors and eBay Watches is for $10,000 and above, this is mandatory. So it's mandatory to use Escrow. So that's pretty exciting. Now if we maybe pull the Zoom off for just a second off my screen and just put it into the room here, I'll load the video of this that explains a little bit more. And hopefully, that will stream. Well, we'll take a look at it and see. Hopefully it will stream, we'll give it a go. So if you can basically take the video off my laptop where I can find the video.Okay. This is loading up now, just give me 1 second. Okay. And this is -- it's a good video because it kind of describes very beautifully kind of what we're doing. Now can -- you can probably reasonably expect that if we're in eBay Motors and we're in eBay Watches that we are probably going to continue to try and deepen our relationship with eBay, and that would be a correct assumption. So there are other categories we are obviously talking to now, and we do anticipate that in the future, we will be in further categories within eBay sites. Okay, my connection so I can actually get the video. Okay, where's the code generator? Sorry, 1 second, here we go.Okay. So just loading up the video now. And just be 2 more seconds. Okay. Now if you can switch back to my screen.[Presentation]
Okay. So hopefully, the audio came through. If not, I can share the video later on with the people. But this is a pretty amazing offering. And I will say that eBay will be rolling out the Authenticity Guarantee in other categories on their site, and we hope to be the exclusive payment method in those as well and also the compulsory payment method. Now you also might have picked up in that video, which I neglected to say earlier is that the cost of the authenticator service and the cost of Escrow is being picked up by eBay. So there is no cost to the buyer or the seller for this amazing service, which I think really stamps out forgeries, fakes and fraud in a massive way, and it certainly ups the game in the space. We are in already a bunch of other watch marketplaces globally. We're in WatchPayer and Watch Buyer. And there are a couple of more that are already in the pipeline, plus a bunch of inbound has happened since this has gone public. So we aim to basically beat the payment system for luxury watches globally, just like we aim to be the payment system for automotive vehicles, boats and airplanes globally as well. I think it's also some pretty good validation of where Escrow is as a business. We've gone through a period where we acquired the business, we rebuilt it, we've launched an API, and we started our sales activity and we're already live in 2 major categories in eBay, which is about as big a customer as you can get. So that's kind of where we're heading with this, is high volume and Tier 1 sort of marketplaces where the -- where we're focusing our sales activity, and we obviously have a lot of inbound happening at the same time. And here's a screenshot of kind of what it looks like today on the eBay website if you're in the U.S. now. System also does work. For the sellers in the U.S., you can actually buy a watch anywhere in the world and also go through Escrow.com as well. That's about to be turned on so other people see it visibly. It's a seller's prerogative to choose optionally above $2,000 and mandatory above $10,000. Our IPv4 address space business is also going gangbusters. I think I've talked about in previous quarters how that's up about 500% year-on-year in the previous quarter or quarter before that. That continues to grow. Again, we are pretty much the exclusive payment system for the global IPv4 space outside of bank transfers. And we -- in the quarter, we actually did the first ever IP address transfer from Latin America to another region. Actually, actually to Latin America from another region because Latin America is right out of IPv4 for address blocks. And so therefore, they buy them from around the rest of the world. And we're actually the ones that are facilitating those transactions. And actually, what we're trying to do is we're trying to get ICAN to recommend us as the only payment method to transfer IP address box. In the quarter, we also rolled out electronic KYC, which allows the friction for people to -- for buyers and sellers to use the site. So we now do real-time identity checking against government databases for some buyers and some sellers. And in terms of our licensing, we're approved in 48 states in the United States. New York is in the final, final, final rounds of, hopefully, a life of license being granted [indiscernible] next before the end of the year. And that's the big state that's left. And then we've got left is Hawaii and Nevada. And Nevada is just simply because the regulation has -- it does not require -- it does now allow third-party background checks, it's going to be a government background check, and we've supplied the -- supplied background checks from both Australian Federal Police, New South Wales Police, et cetera, but they're very brief in nature. So we're -- hopefully, that combined with the Interpol background check and as well as a third-party background check with a provider, we'll get Nevada. We can guarantee you our lives as [ captive ] it was in the state of Nevada are over. We were captives here unfortunately. Unfortunate to hear that, but we've been -- I don't think there's probably an ASX listed company where the executives have been background checked as much -- many times as we have. It's literally -- it's about 50 different jurisdictions now, we've been fingerprinted, background checked and police checked.And some other things in terms of the Escrow business is we've appointed a Commercial Manager for Europe. So they are basically doing the same role that Jackson Elsegood is doing in the U.S. So they're in charge of the payments business as well as basically sales. And so he started a couple of weeks ago. He's up there and up and running and firing. And we look forward to building out the European and the U.K. business with him at the helm. And in conclusion, we had positive net operating cash flow of $1.6 million for the quarter, 4 quarters in a row, $7.8 million year-to-date and ended with cash and cash equivalents of $37.1 million, up 9.9% on pcp. So that's it for the commentary. We can now open up to Q&A, which is going to be moderated by Chris. So maybe if we can move the video back to the room. You've got to see myself, Matt Barrie, you may direct your questions to me or to Neil Katz, the Chief Financial Officer; or to Adam Byrnes, the VP of Product; or to Sarah Tang, who is dialing in, who is the VP of Enterprise. And so Chris, if we could now open it up. I'm not sure how we're going to do this whether you're going to read-up questions or whether we're going to unmute those microphones. Chris?
I have asked for people to message in the chat, and I'll unmute you.
[Operator Instructions] So please send questions. You have the video just now going from the room rather than this computer?
Yes.
All right. Now be sure to ask questions. As always, it takes a little while for somebody to get the courage to ask a question and they kind of come in. So Sarah Tang is unmuted, so you can direct your question to either the 4 of us. [Operator Instructions] So don't be shy. Any questions?
Matt, I'll ask a question. It's Greg Ward from Trafalgar here. Just a quick question. You talked about kind of the experience of these rookie both clients but also freelancers. From a Freelancer point of view, these people that kind of haven't executed the job and haven't gone ahead, has that actually done much damage to your loyal clients who are actually posting jobs and being disappointed that things were disappearing or things weren't getting executed?
Well, I mean, as I said before, there's about USD 250,000 to USD 300,000 in expired fees per month at the pay and it's down now -- Adam, what's the number of that, approximately?
It's about $190,000, I believe.
That $190,000. So that USD 190,000 worth of projects are a combination of either spam projects that were awarded to people that never intended to be completed or paid by the job poster or it's projects that were intended to be completed by the job poster where the freelancer has managed to follow through and the fees have expired because the freelancer has been paid. I estimate, of the $190,000, probably over half of that are real projects that have not been completed successfully. And so that's why we've got those 4 initiatives -- there's actually more than that, but there's 4 things I pointed out in the commentary that we're going to do to stop that. It's a combination of not letting high-value projects be bid on by freelancers that are not part of the Preferred program or Verified; by tightening up the freight plan a little bit to encourage people to be on a plan and put their payment methods, et cetera; tightening up the payment verification requirements of the freelancers so that they are committed and so on. So yes, I would say that there has been some damage to the job posters to the tune of, at most USD 190,000 a month. It's probably more likely to be a little bit over $100,000, probably $120,000 is my guess. We haven't done a root cause analysis on that, but I have awarded one in the last number of weeks. That's what we're completely looking through. But we will tighten it up and we will crack down on that. I mean ultimately, what we could do, at least we could, for example, just require payment verify from everyone. But the problem with that is that we then will kill some of the liquidity from new freelancers who might be exceptional at the job, will actually follow through with the work and complete it successfully, but are a bit too afraid to put their credit card in the upfront before they actually get a job awarded and paid to them. So we have to be careful. It's a highly dynamic system with 48 million active, intelligent people trying to adapt to anything we put in place. And if you think about, for example, the federal government and state government, every time they implement a law, it kind of goes the wrong way and they get unintended consequences and blowback. You're going to be really gentle and really careful and mostly careful at what you do. So we want to be careful here that we -- and improve as we make up net-net positive and don't have unintended consequences. But yes, that kind of quantifies the extent of what we think the issue is around expired fees.
And do you have visibility down to the client posting or whether you've actually lost any long-term kind of customers of size?
Yes. So we know who the customer is. We know exactly the project. We know what we're trying to get done. There's a root cause analysis that's being performed right now to determine what the breakdown is in terms of spam projects or job posters who are not serious versus freelancers who are not serious and I'm waiting for the results for that. And I can talk about that more in the next quarter, perhaps when that comes in.
Okay. And just one more follow-up. The debt burden of the tech that you've finally completed. What has been the momentum in the last few weeks as a result of finishing that?
Right. So I talked about, for example, with mobile, since we ripped out the mobile legacy website and we replaced that with a responsive site, that's up about 56%, 57% in terms of fees. We hope to achieve similar numbers for Android and iOS. And as I mentioned before, that's going into beta in about a week. And we hope by -- certainly in this quarter, we ripped out and -- rip and replace of the legacy iOS and Android apps. And in terms of the hourly funnel, I talked about that. And we've actually got that -- we're already back to trend, got the long-term trend. So the milestones for hourly, that was up 26.5% in the quarter on pcp. And we expect that trend to continue, if not accelerate, because we've got a few other improvements we still have to make to that funnel, including requiring a smart upfront payment from the job poster before the hourly project can commence. So we should get a little bit of uplift from that as well. Adam, any other comments to make here around improvements in technical debt that what we can observe in the marketplace in terms of metrics improving?
Yes. So I mean, obviously, we -- now you've covered mobile and you've covered hourly, I guess, some other -- some of the metrics of interest. I mean just generally across the fee fixed price funnel, we're constantly making small tweaks and is improving. We've also seen a large increase in milestone value throughout the marketplace.
We should -- let me talk about that a little bit. So these are -- so we've obviously got a big increase in cash coming to the business. Deposits are up and GPV and GMV are up. But the other thing that's been growing is milestones that have been created for projects that have yet to be released and yet to potentially have a fee levy on that. So maybe you want to talk about -- do you have the numbers, the value of the milestones and how much they've increased? Is that...
I don't have them handy.
It's about 20-something percent.
Yes, that's correct.
Low 20s. So there is...
There's much [indiscernible]
There's lots of cash that's coming to the business that's in projects, they're in progress still, which we should see the benefit from ensuing quarters as well.
And just with the...
Neil?
There's a retention factor. So we've had a large increase in user deposits. So once the money is in the system, not all of it goes out and it stays in the system. So over time, as deposits keep growing, our cash balances are going to keep growing.
Right. Okay. And in terms of the nature of the improvement and the increased volume, is that coming from more experienced posters and the enterprise customers or at least the bigger ticket item customers or is it new customers as well? So just finding the functionality a lot easier to work with.
The price GMV has a hockey stick growth to it, but it's still off a low base. So we have a lot of irons in the fire for some big moon shots with enterprise where the GMV is in the tens of millions or in some circumstances, actually an order of magnitude higher than that where we've got to do a lot of work to get there. But if we get to -- one of these big customers to really get to the promised land, it's going to be material like very, very, very material business, in fact, could be even larger than the current GMV of the whole business is today. So there's a lot going in there in the enterprise. But right now it's not a major contributor in the big scheme of things. In the last quarter, there was a big contributor from new users, new clients and new freelancers and so forth. Everyone went to lockdown. The only way they could work was online, big flow of work came in. In the third quarter, the ratio went a little bit more in the direction of repeat users and some of the freelancers and some of the clients in Q2 that posted jobs got more experience. And so things like the average project size lifted a little bit. But we've got some big contributors from product improvements on top of that, all right? So we have gone through a huge amount of technical debt. And it's -- some of these -- some of the changes are like night and day. If you used, for example, the legacy mobile website before, and they used the mobile website now, it's literally night and day, like it's no comparison. So it's like 100x better in terms of features, functionality, usability. It's incredible.
Great. And is one of the key metrics there is conversion rates or completion of post rates? Is that where you're seeing it come through?
Absolutely. And in some circumstances in the mobile legacy webapp, their conversion rate was 0. What were some of the things...
Hourly.
Like hourly projects?
Hourly projects. We couldn't do, really.
You couldn't?
Really, I mean, you could, but you'd have to revert back to a desktop device about halfway through the flow. Now you can do it completely end-to-end on a mobile device, which means a huge difference.
And memberships are not available sometimes?
Correct. Memberships was another one that -- you really just couldn't buy a membership previously. So you can now. It's just great on the freelancer side of things. Just a quick update on the milestone value, it's up 26.5% in the third quarter.
This is pcp.
Pcp, USD.
And Adam, just to get a feel of those hourly post, hourly on mobile, what portion of that could be more recently the GMV as a proportion of total GMV?
It's not particularly high. The hourly as a whole is quite high. But if you're talking about hourly done exclusively on a mobile device, then no, it's not particularly high at all.
It touches something like 80% of jobs.
That's correct. So the hard part is how do you determine what is and isn't a mobile job. If you're talking about exclusively mobile as in end-to-end, never touches a desktop device, that percentage is quite low. But if you're talking about, at some point, touches the experience on a mobile device, then that percentage grows dramatically. It depends exactly how you define mobile versus desktop.
But now you actually have the full functionality -- as for the web, for example, we expect those numbers to rise a lot. And certainly, with iOS and Android being replaced as well. You just expect that the whole contributor from mobile as a whole will go up. And given that -- I think -- is it -- it's over 50% of our traffic is mobile?
It's about that. Actually, it's just over, yes.
Yes. Over 50% of traffic is mobile and mobile is a minority contributor to the revenue line of the business. For the first time on mobile, you'll be able to actually access the full functionality of the site. There's a couple of pages left to go that have to move to the SPA or webapp architecture. They're minority pages for the most part, little bits and pieces here or there. If you're like browsing the settings page, for example, it might not bring that well or you can...
Browse analytics.
Browsing the FAQs or some of the search page, et cetera. But we've got teams working on a bunch of stuff. We're certainly over the hill. And the key pages have been migrated. Now we'll continue to make improvements on those key pages to make them more mobile friendly, and there's a lot of UX and UI polish we need to make everywhere on the site, even on the desktop site, to improve the experience for users. But we are bidden off a massive amount of technical debt, and we're in the home streak in terms of SPA and in terms of, well, the front end and in terms of [indiscernible] And the great thing about this is in combination with that allowing us to get into new things and build new products and new features, the collaborative tools and so on, in addition to increase the productivity of the staff massively because it's one team when doing the codebase. David has a question.
Matt, yes, just a quick one, and apologies, I was a little bit late to the call. But just was wondering with the arrangement with eBay Motors, whether there was opportunity to extend that to markets outside of the U.S.A.? And then maybe just as a follow-up, I think in the last quarterly, you mentioned that another major automotive marketplace was signed and being integrated. I'm not sure if there's any updates on that.
Yes. So with eBay, we are in discussions with other categories as well as other countries. I think it's more likely that we'll get another category before we get another country, but we have had discussions already. Jackson has been in discussions there, where we have talked to other country managers of, for example, Motors. But we're in discussions with multiple category managers. And the opportunity -- and then the Authenticity Guarantee will be rolling out to other categories of eBay. And we're currently the exclusive payment provider for the Authenticity Guarantee, in fact, that I know who possibly provide a competitive payment solution for the Authenticity Guarantee. In addition, we integrated as a payment method separately for the Authenticity Guarantee. So for $2,000 watches and the $10,000 watches, you can choose either the Authenticity Guarantee, which is mandatory or Escrow.com payment method outside of the Authenticity Guarantee. So there are a lot of efforts happening with eBay. And I have some level of confidence that we will -- if we're in cars, we're in watches, then we're in other places, right? So and -- but the big focus is on the U.S., and I think that we'll see a lot more activity in the U.S. on eBay before we will see going to other countries. Now your other question was about the other major North American car marketplace, we actually integrate and won that business a long time ago. COVID came along and then they have limited resources, switched their focus to dealers. As you know, the second-hand car market around the world is booming because no one gets to public transport anymore. And so they talk about your resources and put it into that. We had -- we did have an issue when we launched with them, where it was a new -- paying through Escrow was new. And so users were not very experienced, et cetera. And one thing that happened was these car classified sites have no idea where the car is sold. They make an assumption that the car is sold because the listing doesn't get renewed. But because they don't take the payment, they don't know anything about the buyer or anything about seller really. They might know, in some circumstances, okay, you're a dealer, there's a lot of dealer inventory. We know who you are, et cetera, visits you, et cetera. But in private inventory, so this is the peer-to-peer, where it's just someone selling the car to somebody else. They don't know anything about them. In some circumstances, they don't even know the phone number of the person, right? They just have an e-mail address for them. Or maybe they have the e-mail or the phone number, right? And so there's actually a fair bit of fraud happening in those marketplaces. And so one thing that happened is when we went live in that marketplace, there was a little bit of fraud that we detected where someone was trying to pretend to be Escrow. And so we said, "Okay, what we need is we need the phone numbers for these users." So you start clicking the phone numbers sent to us, so we can send SMS to a bunch of other things, et cetera. And they said, "No problem," and they start building that sort of work, but there was a little bit of work to tighten that up. In the meantime, COVID hit and they go actually -- because dealers are going crazy selling second-hand cars and so forth, that's really focused on dealers now. And dealers also get a bit of infrastructure because less people walking in and out of the dealerships, so they need a bit more infrastructure data and buy and sell online. And so they're just unfortunately deprived us a little bit. We've won the account. We've integrated. There's a bunch of work that's in progress, but we're just kind of waiting to get back in there. And so we're hopeful now with the U.S. and so forth -- and Canada sort of opening up a little bit that we can basically get that moving again. But there's a lot happening with Escrow. And again, we've also got limited resources and we want to extract the maximum value. And because we're kind of moving through things like eBay and there's actually some bunch of other car marketplaces that come through now who won the business for this watch marketplaces. We've done a lot of that in the art world. So we're in as, we're in Artsy, we're in Artland and Artland is the third art marketplace we're in, as we're aspiring for the fine art world. We're basically -- if the deal is hot, I mean, we can make an integration happen, we jump on it and we make it happen. And the great thing about Escrow is the integration is fairly straightforward, and it's fairly quick. I mean with eBay Watches, we announced that I think in June, and we're live as of Monday U.S. time. So even though it's a deep complex integration, we're doing this faster and faster and faster now which is good. So if we smell blood in the sales funnel, we jump on it, right? So that's kind of -- unfortunately, we've won that business in terms of the other North American car marketplaces. It's major, it's #1 in its field. It's just that we have to get some more time with their engineers to actually make it happen. Any questions?Don't be afraid to ask a question. Just ping something on the chat and I'll gladly answer them. Okay. And as always, if you want to ask your question privately, we have an arranged time after the quarterly to discuss with you. But open up for another minute or 2 to questions if anyone wants to ask one. Otherwise, we'll...
Matt, if I can. Maybe just a quick follow-up. Just on the eBay Motors integration. Again, this is just my anecdotal observation, but it seems like there's some very good take-up from private sellers. But if you look at the dealers, a lot of them, at least, that don't seem to have yet jumped on to the integration. Are you noticing more of the dealers coming on board with Escrow? Or is it still predominantly something that you see as meeting a need or being used by the private sellers on the Internet?
Correction. It's not available to dealers, it's only available to private sellers. Dealers -- typically, if you buy a car from Toyota, you typically don't have problem sending your money to Toyota. There's not a trust, right, it's an issue Toyota will give your money back. And the other thing is that dealers typically require -- they make them out of financing. So they typically don't want the money to be sent to them. They typically want you to go and get financing. So it's designed for this issues of trust, right? And so that's why it's designed for private party to private party. So it's not available for dealers. There are some cases where some dealers have used us outside of the integration, both with eBay and also externally, where they're shipping a car over a very long distance. The buyer is nervous about the situation. And so the money is held in Escrow while the car transits. But for eBay's integration, it's not available for dealers at all.
Okay. Okay. I was thinking there was a need in that if they were selling second-hand cars, part of the comfort you would get with Escrow is that you get to see if it was described accurately. And -- but you're saying it's predominantly there just to protect payments and such. So you don't really see integration with dealers as being likely?
We do have plans at some point to have a dealer [ offering ] before it's financed because the dealers need to see a finance component to make it their finance component where they make their money to make it happen. It's interesting you bring that up. The AAA of the U.S., like the NRMA, we had an engagement with them about 2 years ago, where they wanted to turn their AAA locations into a place where you could bring second-hand cars and it would go through Escrow and AAA would certify, a bit like the Authenticity Guarantee that I [indiscernible] it was that equivalent for cars. So we did a part with them. That didn't move forward in a big way, but they are -- actually had come back to us and they're talking to us again. So at some point, something might happen there. In addition, we've had another equivalent of AAA from a different country come to us. And they're very keen to do something, which is actually more of a marketplace model. So I think we will tip automotive globally over the next few years. It'll take a little bit of time. There's a bit of consumer behavior that has to change. And certainly, as we can move from an optional payment method to a mandatory payment method and so on and people get comfortable. I remember when I was at Stanford University at 1997 and eBay came out just before that, people were saying, why would you send money to someone in advance that you don't know to buy something off this eBay, like they'll just take your money and run. And I remember the first time I ordered a pizza from a website. I was in the computing lab and I ordered pizza from the university in Palo Alto to the computing lab at 10:00 at night, I thought there's no way my pizza is going arrive. No -- there's no way. Can't buy pizza, the Internet doesn't make any sense, right? And we literally put the order in and there was no payment because there's no way of collecting the money, just they had to come, bring the pizza, and then you give them some cash. And the guy actually tracked us down on-campus, found the lab, found the room we're in, banging the door a few hours later and say that your pizza's here and -- we're shocked to think that you order a pizza on the Internet.The same thing is going happen with cars where people didn't think you could pay for a car over the Internet in the future that they're going to find out, it's actually going to be a better way of paying for a car because the problem you have now is you pick up a car, [ you're as a lemon ]. It's a whole field of research. Actually, I've read a paper the other day about marketplaces where there's lemons. I think Doug from Ford, he's on the call, he talked to me about this in detail, right, you have this information asymmetry between one party who know if there's a lemon or not and the other party has no idea. And as a result, you have problems in liquidity and pricing. But in the future, when you go buy a car from someone or a dealer or what have you, the better experience from a consumer's perspective is give me 7 days or 3 days to drive it around. I put the money into the system into Escrow trust. You'll get your money if I don't come back in 3 days or 7 days. But if I come back within 3 days or 7 days for any reason whatsoever, I give my money back instantly, right? And compare that to the situation of today, we've got a dealer, you drive a car at the block, you've already paid them because they won't give it to you unless you pay them in advance. And you don't know what's good -- if it is working or not. And then down the track, there might be an issue, but it might be 3 months down the track or 4 months down the track or even might be just after you've driven it out and you go to a -- you're on mechanic and you're trying to figure out what -- if it's okay or not, trying to get that rectified is very difficult, right? Well, yes. I mean, that's the whole reason why eBay went to us for Motors because their insurance premiums for their Motors product went up in the tens of millions of dollars in terms of insurance costs due to the buyer protection they're offering. And the experience of consumers was terrible is literally filling in a claim form, was correctly as described, did you follow the procedures properly, is it the right categories and then wait 4 weeks, 6 weeks, 8 weeks until an assessor looks at it and decides what's going to happen and maybe get your money back, right? So instead with us, we hold the money, you get the goods, you got a period of time to inspect it. You can return any time within that period unconditionally or get your money back. You'll get the money that goes through to the seller. So it's a much better experience from a consumer's perspective. And also, the other thing to remember is that no one can offer Escrow like we offer it because of the regulation and the way it's -- the regulatory environment, it's state by state licensing. And it would take -- I mean I could not recreate Escrow from scratch, even if I wanted to today because the only reason that exists is it fairly started 1999. SoftBank and others put USD 40 million into it and it's been running for 20 years, right? And over the 20 years, it's picked up [indiscernible] 48 states to operate in terms of licensing. And if I wanted to do this again, it would take a decade and a hell lot of money, and it would be impossible to get going because the money sits off-balance sheet and trust, and you can't use it to for working capital. So to make $1 million, you need $70 million of volume, right? You can't -- it's a business that can't be replicated. And the positive thing is now that regulators like the DBO in California, which is just Chase that changed its name, has written, for example, for Airbnb and said, you need to have an Escrow license. And Airbnb can make the decision, "Yes, okay, I'll go for an Escrow license in California." Maybe after 2 years, they'll get that license. But then they need one in Florida and New York and North Carolina and South Carolina and Alabama and Alaska and I get to work. I mean, Neil, maybe you have some words to add. Could anyone -- could we start this again from scratch and build it?
No, not easily. I mean the lead time to getting licenses is very long. When we took over the businesses to -- the change of control process was long enough for each license, but just new license application is months, years in some cases, plus the bonding requirements, the capital requirements is huge.
And the auditing, how often do you?
Auditing. Well, we effectively got an examination going on almost all the time. Because every state does an examination, the regulation requires exams to be done, in some cases, every 2 years, in some cases, annually, some cases every 3 years. So we've almost got the regulator doing an examination at any time of the year. So I'd say about 9 months of the year, we've got an examination going on in 1 state or the other. So there are a lot of barriers to entry into this business.
Thanks for that. It seems like a great opportunity. And I do agree that with eBay, it does seem like there's a lot of other categories that come to mind that would be just as beneficial of this integration than just jewelry.
Well, we're actually not in jewelry at always, pretty much in watches. So jewelry is a natural place where we can go. Anywhere where there's fakes, forgeries or fraud and high-value items is a natural place for us to go. And in fact, even in just the mass market, there are plenty of places where an item of value is being sold. And if you think about this business in industrial, bringing in shipping containers, right? You order from a factory in China and the first order of the shipping container arrives, and it's all great. The fourth order comes through and all the defects from the first 3 orders are shopped into the floor shipping it down. At the moment, all your quality infrastructure is up in such a way -- and the global shipping business is up in such a way that's all freight and board. So you've you got a letter of credit and provide the money and as soon as it free up -- as soon as it's free on board in somewhere in China or wherever it may be, [indiscernible] right? And maybe SGS to do the quality inspection [indiscernible] there'll be boxes, take some [ furloughs ] send it across -- apparently what's going on. But instead, with Escrow, you can have the product and the shipping container delivers to your warehouse and then you can inspect and then you can release the money, right? And then maybe as part of the contract, you said the defect rate will be 2% and above that, I need to be refunded.
Sure. I mean, I might just say one other thing. We haven't even really touched on a lot of the value-added services we can provide on this business. The moment we're just doing the straight payment, but there's so much intelligence one could get on motor vehicles. When there's a VIN number and a [ retro ] -- and in any piece of equipment that have got serial numbers if we're able to potentially add value to users about information about that asset that they're purchasing could certainly add value as well.
Yes. I mean, we -- at the moment, for example, motor vehicles, we do things like total collection we do lien holder power of, we do lease swap arrangements. There's a range of things we do around that. And over time, we'll probably know the price of everything. So there's a bunch of things we do -- can do to that. At the moment, we know the price of domain names because we are effectively the major payment method used globally for domain name. So we've bought and sold the domain names for SpaceX, uber.com, snapchat.com, instagram.com, wechat.com, JD.com, aws.com, prime.com for Amazon, chrome.com, gmail.com. And if you name it as a domain name, we -- it's gone through us at some point. And so we do the price of every domain name. And in fact, we build a pricing tool, for example, we type the name whatever the price is. And these things are now selling for $5 million, $10 million a [ poll ] if they're a premium name. So just like we can do that for domains over time, we should be able to do it with automotive, we should be able to do it with a bunch of different carriers. But it's pretty interesting. Any other questions? Okay. Well, if there's no further questions, we'll call the meeting to a close. Thank you very much for attending. And as I said before, you're always welcome to contact us privately to have a discussion with any of the management team. So thank you for your time.
Thanks.
Thank you.