Mass layoffs during the pandemic turned many people into “solopreneurs” and HoneyBook wants to help them manage their businesses.
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The San Francisco-based company raised $155 million in Series D funding to continue developing its client experience and financial management platform for service-based small businesses and freelancers.
Oz Alon and his wife, Naama Alon, co-founded the company with CTO Dror Shimoni after being small business owners. HoneyBook, which is available for a monthly subscription of $40, combines billing, contracts and client communication tools to enable business owners to stay organized, CEO Oz Alon told Crunchbase News.
“We loved what we were doing, but not the business part, which involved responding quickly to billing, payments and other things when what we wanted to do was run our businesses,” he said. “We started HoneyBook to solve the community piece for small businesses so they can put their best foot forward and stay organized.”
Durable Capital Partners led the round and was joined by Tiger Global Management, Battery Ventures, Zeev Ventures and 01 Advisors, as well as existing investors Norwest Venture Partners and Citi Ventures. The new funding gives HoneyBook a total of $248 million in venture-backed funding since the company was founded in 2013, as well as a more than $1 billion valuation, according to Alon.
“We believe the accelerated trends of self-employed business growth and small business digitization will continue as the economic recovery builds,” said Henry Ellenbogen, managing partner and chief investment officer of Durable Capital Partners, via email. “With its visionary leadership and proven ability to innovate and provide unique solutions for the service-based small business sector, we believe HoneyBook will drive employment, scale its business and define its industry in the years ahead.”
HoneyBook went after the Series D so it could invest in product development, new hires and expanding into new verticals. Alon would also like to add financial services tools that customers are asking for, such as the ability to accept payments, access to capital to invest in their businesses, more control around expenses, and to enable faster/more personalized responses to customers.
“In the past, businesses try to respond within 24 hours, but today, if you don’t respond in 24 minutes, you may lose a contract,” he added.
In the past year, Alon recognized the trend of small businesses increasing in the U.S. Americans have an entrepreneurial spirit, so when people lost jobs, they created a job, he said.
All of that job creation led to the company experiencing a tripling in annual recurring revenue and a more than doubling of new subscribers in the U.S. and Canada in the past year. At the same time, members have booked more than $1 billion in business on the platform in the past nine months, Alon said.
“Reaching a $1 billion valuation is a testament to how investors are looking at the community and the potential of our business,” Alon said. “Investors saw these businesses through the past year and how resilient they were. We are amazed by the growth in the past year. We are still seeing trends going on and believe we will double again next year.”
Feature photo of HoneyBook co-founders Dror Shimoni, Naama Alon and Oz Alon, and inset screenshot courtesy of company.
Blogroll illustration: Li-Anne Dias
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