Citi Ventures just led a $28 million round for a startup that helps freelancers manage their finances
- Citigroup's investment arm led a $28 million funding round in a San Francisco-based software company that helps creative freelancers manage their finances.
- The investment comes as more US workers are participating in the "gig economy," meaning they're outside contractors who don't rely on long-term, traditional employers.
The investment arm of Citigroup is backing a software company that's aimed at helping freelancers manage their bills and projects.
San Francisco-based HoneyBook has just raised $28 million in its Series C round led by Citi Ventures, with participation from all existing investors, including Norwest Venture Partners and Aleph. The company has raised a total of $72 million to-date.HoneyBook, co-founded by a married couple, Oz & Naama Alon, makes a client management software that is geared towards small businesses in creative industries like photography, web design, and wedding planning. It utilizes other fintech tools like Stripe to streamline time-consuming processes from capturing leads and delivering proposals to processing payments.
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The company, which has surpassed $1 billion in bookings through its platform, is also exploring a new partnership with Citibank to serve its members with new financial products, according to HoneyBook's CEO Oz Alon.
"We are in early conversations but would certainly aspire to later down the road," he said. "For example, we are looking at different ways we can offer capital and smoothing the cash flow for our members. Some of these small businesses don't get two paychecks a month. [For] some months they get income, sometimes they don't. We would like to work with Citi to smooth out their cash flows."
The gig economy, also known as the freelance economy, is growing. An Intuit report found that gig workers represented 36% of the American workforce in 2016 and that figure will grow to 43% by 2020. According to the Bureau of Labor Statistics, 16.5 million Americans are working in "contingent" or "alternative work arrangements."