Startups Venture

General Catalyst, QED Lead Collective’s $8.65M Funding For Self-employed Community

Collective is setting out to offer self-employed people, who CEO Hooman Radfar calls “businesses-of-one,” with the first online back office platform designed to support and connect the self-employed community, which comprises nearly 30 percent of the U.S. workforce.

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“We are trying to push that concept, businesses-of-one, forward,” he told Crunchbase News. “What we have found from our members is that though some may feel like a freelancer; for others, that is their full-time business. If we could give them a term that is uplifting, we will be doing more justice by them.”

The San Francisco-based company recently raised $8.65 million in its first institutional funding round to help people pool their resources and gain support with starting their own businesses.

General Catalyst and QED Investors led the round with additional investment from Gradient Ventures and Expa, as well as a group of nine individual investors.

“Businesses-of-one have seen explosive growth, especially in recent months as the pandemic accelerates the shift toward remote work and flexible careers,” Niko Bonatsos, managing director at General Catalyst, said in a statement. “Unfortunately, that growth doesn’t mean it has gotten any easier to incorporate and operate as an individual. This is where Collective can really excel.”

Radfar estimates that the number of businesses-of-one will increase to more than 50 percent by 2027, so it is time for the company to launch its product after begging in beta last year. Collective will use the funding to bring the product to market, develop new technologies and products, and build out additional community features, he said.

Membership, which costs $199 per month, grew four times since 2019. On average, Collective members saved $16,000 last year on services such as S corp formation, third-party software and accounting, he added.

“We are working on a pilot with our current membership, which was exploding due to the pandemic, and we need to build out some features and products for our members to have a good experience,” Radfar said. “Our vision is how to make it easy for you to focus on your passion and not worry about the paperwork.”

Illustration: Dom Guzman

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