As more people become self-employed, Lili, a mobile banking service for U.S. freelancers, is getting ahead of the tailwinds with $55 million in Series B funding.
Subscribe to the Crunchbase Daily
The New York-based company provides free banking and financial tools for freelancers and gig-economy workers, including expense management, tax preparation and no-fee accounts. It makes money from interchange fees whenever users swipe their credit card, Lili CEO Lilac Bar David told Crunchbase News.
New features include “Personalized Tax Buckets” that enable users to put away a certain percentage of deposits for tax payment purposes, as well as an “Emergency Bucket” so users can allocate a percentage of funds for potential emergencies.
“There has been a huge adoption of Lili since the global pandemic started,” Bar David said. “One of the biggest challenges is taxes because they are not deducted compared to regular jobs. That’s why we developed the tax buckets, so it takes out a certain percentage, and they always have that money set aside.”
“The other pain point is about expenses and tracking,” she added. “We built into Lili something like a dating experience. Every time you swipe your card, the expenses are categorized, so you swipe left or right for business expenses, and everything populates.”
Dovi Frances, Group 11 founding partner, said in an interview that this is the third time his firm, made up of financial investors, is infusing Lili with capital, and its third time leading the investment.
The initial investment was driven by product market fit, but this recent investment was proof that there was not only product market fit, but the company’s ability to “scale exponentially,” bringing in hundreds of thousands of users in two years.
“Now they can take that scale and grow to millions of customers in the next two years,” Frances added. “The future of this will be far more prevalent among women, especially with COVID. Lili is also matching the needs of freelancers who don’t have time to track and itemize expenses, as well as who need help filing taxes and issuing invoices.”
Meanwhile, Bar David intends to deploy the new funding into development, including new features around invoicing, payments and credit products, as well as reaching more customers.
She said the timing was right for the new funding because she expects the freelance economy to grow to more than 50 percent of the population by the end of 2021. The company is currently working with 200,000 customers in all 50 states in 30 different job segments.
The company’s next steps will involve expanding product features, growing the brand and building out a new category of products for freelancers.
“People don’t appreciate how hard it is to build a business, and we are in a position to define a new category,” Bar David said. “There is consumer and business banking, but freelance is somewhere in between, so we are working to define that segment and target them with products and services.”
Feature photo of Liran Zelkha and Lilac Bar David and inset photo courtesy of Lili.
Blogroll illustration: Li-Anne Dias
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.