Israeli company HoneyBook, which develops a financial management platform for small businesses and self-employed people, today announced the completion of a $28 million financing round. City Ventures, the investment fund of Citigroup led the round, with participation from HoneyBook's previous investors, such as venture capital funds Vintage Investment Partners, Norwest Venture Partners, and Aleph. Including the new round, HoneyBook has raised a total of $70 million.
Half of HoneyBook's 100 employees are in its development center in Israel and half in the US. The company will use the money from the current financing round to double its staff in the next two years in its two locations. Citi Ventures director and venture investing lead Orit Shinar said that her fund's investment opened the way to a partnership between Citigroup and the startup.
The current trend in the US labor market is away from regular employment and towards small businesses and freelance work. "Today's figures show that the number of freelancers is increasing, and they have special needs," Shinar says. "…we believe, as a pioneer in its space, HoneyBook can become a market leader in the US. We want to consider how to give this growing group the best service, and we're doing it through our investment in HoneyBook."
Three entrepreneurs founded HoneyBook in 2013: Oz and Naama Alon and Dror Shimoni. The company began as an event management platform. The idea to start a company came when the entrepreneurs realized that management in the weddings market was seriously out-of-date in the Internet era. They founded a platform for managing and planning events for suppliers and service providers that created a stir. The company raised $32 million in a six-month period in 2014-2015.
The labor market in the US is changing. The increase in the number of self-employed people and service providers led HoneyBook to expand its activity beyond the events sector. The company raised $14 million in July 2016 from Vintage and its previous investors in a round that was not reported in the media. It used the money to expand to the market of self-employed people and small businesses, and to increase the platform's capabilities. The company currently serves small businesses and the self-employed in all fields, mainly in the creative sectors, including graphic designers, website designers, business coaches, interior decorators, photographers, and architects. The business turnover of HoneyBook's customers on its platform exceeds $1 billion a year. In addition to communications with its existing customers, it allows them to find new customers. Following the change, the company reports that it increased the number of its new customers by 150% in 2018. HoneyBook currently has tens of thousands of paying customers on monthly or yearly subscriptions. In addition to its subscription fees, the company also has revenue from commissions on payments and the financial products that it offers on its platform.
Published by Globes, Israel business news - en.globes.co.il - on March 21, 2019
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