The hidden benefits of adding a CTO to your board

The pandemic forced companies around the world to adjust to a “new normal,” which caused many leaders to pivot their business strategies and adopt new technologies to continue operations. In a time of chaos and change, there is no senior leader that can navigate this sort of change better than a CTO.

Not only do CTOs understand the ever-changing tech landscape, they also provide invaluable insights to help organizations go beyond traditional IT conversations and leverage technology to successfully scale businesses.

Boards are facing pressure to be strategic and thoughtful on how to evolve in the rapidly iterating world of technology, and a CTO is uniquely positioned to address specific challenges.

There are now more reasons than ever to consider adding a CTO to your board. As a CTO myself, I know how important and impactful it can be to have technical-minded leaders on a company’s board of directors. At a time when companies are accelerating their digital transformation, it’s critical to have diverse technical perspectives and people from varying backgrounds, as transformations are a mix of people, process and technology.

Drawing on my experience on Lightbend’s board of directors, here are five hidden benefits of making space at the table for a CTO.

A unique mind (and skill) set

Currently, most boards of directors are composed of former CEOs, CFOs and investors. While such executives bring vast experience, they have very specific expertise, and that frequently does not include technical proficiency. In order for a company to be successful, your board needs to have people with different backgrounds and expertise.

Inviting different perspectives forces companies out of the groupthink mentality and find new, creative solutions to their problems. Diverse perspectives aren’t just about the title –– racial ethnicity and gender diversity are clearly a play here as well.

Deep understanding of tech

For a product-led company, having a CTO who has been close to product development and innovation can bring deep insights and understanding to the boardroom. Boards are facing pressure to be strategic and thoughtful on how to evolve in the rapidly iterating world of technology, and a CTO is uniquely positioned to address specific challenges.

The LatAm funding boom continues as Kaszek raises $1B across a duo of funds

Long before SoftBank launched its $2 billion Innovation Fund in Latin America, and before Andreessen Horowitz began actively investing in the region, Sao Paulo-based Kaszek has been putting money into promising startups since 2011, helping spawn nine unicorns along the way.

And now, the early-stage VC firm is announcing its largest fund closures to date: Kaszek Ventures V, a $475 million early-stage fund, believed to be the largest vehicle of its kind ever raised in the region, and Kaszek Ventures Opportunity II, a $525 million for later-stage investments.

Over the years, Kaszek has backed 91 companies, which the firm says collectively have raised over $10 billion in capital. 

MercadoLibre co-founder Hernán Kazah and the company’s ex-CFO, Nicolas Szekasy, founded Kaszek a decade ago after leaving LatAm’s answer to Amazon. Fun fact: the firm’s name comes from a combination of their two last names: Ka-Szek. Rounding out the team are Nicolas Berman, former VP at MercadoLibre, Santiago Fossatti, Andy Young and Mariana Donangelo.

Kaszek founded its first fund in 2011, raising $95 million, an impressive sum at that time. Funds II and III closed in 2014 and 2017, raising $135 million and $200 million, respectively. By 2019, Kaszek had closed on its fourth fund, raising $375 million and its first Opportunity Fund, reserving $225 million for later-stage investing in existing portfolio companies.

It’s notable that in its fifth fund, Kaszek is reserving more of its new capital to fund later-stage investments – a testament to its faith in its current portfolio. Both funds, according to Kaszek, were “several times oversubscribed” with demand coming globally from university endowments, global foundations, technology funds and several tech entrepreneurs.

Silicon Valley-based Sequoia Capital has been an LP since day one via Sequoia Heritage, its community investment office. Also, Connecticut-based Wesleyan University is an LP with Chief Investment Officer Anne Martin describing the founding team as “internet pioneers.”

In recent years, there’s been an explosion of global investor interest in Latin American startups. The region’s startup scene is seeing a surge of fundraises, with new unicorns emerging with increasing regularity. And Kaszek has been at the heart of it all.

“We have been at the epicenter of the technology ecosystem in Latin America since 1999, first with MercadoLibre and now with Kaszek, and have witnessed firsthand the extraordinary  evolution that the sector has experienced since its infancy,” said managing partner and co-founder Kazah. “When MercadoLibre started, the internet penetration was less than 3% and it was mostly dial-up connections. Today, more than two decades later, technology secular trends are stronger than ever before as we are experiencing an acceleration towards digitalization.”

Kaszek has not yet backed any companies out of its newest investment vehicles, but plans to put money in 20 to 30 companies out of its early-stage fund, with check sizes ranging from $500,000 to $25 million, according to Kazah. Its Opportunity Fund investments will be more concentrated with the firm likely backing 10 to 15 companies with check sizes ranging from $10 million to $35 million. The firm is industry agnostic, with Kazah saying it considers “any industry where technology is playing a transformational role.”

General partner and co-founder Szekasy says that In the firm’s first funds, Kaszek mostly backed first-time entrepreneurs. But in its last early-stage fund, it began backing more teams led by repeat entrepreneurs or by founders spawned out of some of the region’s more successful startups.As many VC firms do, Kaszek describes its investment strategy as providing more than capital, but also becoming partners with the founders of its portfolio companies. For example, Creditas founder and CEO Sergio Furio describes the firm as “the co-founder I did not have.”

While the firm declined to comment on performance, a source with firsthand knowledge of its metrics over the years tells TechCrunch that it’s quite impressive with MOICS ranging from 19.2 for Fund I to 2.6 for Fund IV.

The firm’s active portfolio currently consists of 71 companies. Kaszek was one of the earliest investors in Brazilian neobank Nubank, just one of 9 unicorns it has helped build over the years. Other unicorns it’s backed include MadeiraMadeira, PedidosYa, proptech startup QuintoAndar, Gympass, Loggi, Creditas, Kavak and Bitso.

The firm’s investments have largely concentrated in Brazil and Mexico (the two startup hotspots of the region) and Colombia but the firm has also backed startups based in other countries in the region such as DigitalHouse (which was formed in Argentina), NotCo (originally founded in Chile) and Kushki (launched first in Ecuador). It has people on the ground in its home base of Brazil as well as Mexico, the United States, Argentina and Uruguay. 

“We have always believed that the strong secular technology trends that we were seeing 20 years ago, evident in the US and a little later in China, were going to happen in Latin America,” Kazah told TechCrunch. “…Everything we predicted back then was going to happen, happened. Maybe it happened later, but it was also much larger and more comprehensive than what we had initially imagined. That is typically what happens with innovations, they take off later than you think, but fly much higher than you ever imagined.” 

Ex-Square execs launch Found to help the self-employed, raise $12.75M from Sequoia

If you’ve ever been self-employed you know what a pain it is to keep up with the hassles of running a business. From bookkeeping to invoicing to paying taxes — it’s one big headache.

Freelancers and self-employed people often turn to a number of different solutions to try and address different aspects of running their business. It can be a lot to keep up with.

Enter Found. Previously called Indie, the startup was founded by two former Square execs who got firsthand insight into how SMBs paid their employees.

Lauren Myrick joined Square in 2010 and was the second project manager at the company. She helped launch its first POS (point-of-sale) product and its SaaS products. She eventually became GM of its payroll business unit, and that was her first foray into taxes and understanding their implication. Co-founder Connor Dunn ran engineering for Square Payroll.

After that experience, the pair saw an opportunity to launch a suite of services for self-employed businesses, which have been growing even faster during COVID.

“We started to pay attention to the movement toward self-employment,” Myrick told TechCrunch.

So in 2019, the pair interviewed “lots” of self-employed people to better understand their pain points. What they found is that taxes and expense tracking were considered among the more painful and expensive parts of being self-employed. So they formed Found (formerly called Indie) with the goal of creating a “one-stop shop” for business banking, bookkeeping and taxes for self-employed businesses.

And today, the San Francisco-based startup has raised $12.75 million in a round led by Sequoia that also included participation from some angel investors.

Image Credits: Found co-founders Lauren Myrick and Connor Dunn / Found

Myrick is no stranger to being self-employed herself, having worked as a public accountant after college. Also, her sister is a self-employed yoga instructor.

In Found, Myrick’s two previous professional worlds have come together. 

“With my accounting background and what I learned at Square, I had this big aha moment that we could become a ledger for these businesses, and solve their bookkeeping and tax needs through software,” she said. “So that’s what we’ve built.”

Customers can use the platform to do things like deposit business income, obtain a debit card for business purchases and calculate how much they owe in taxes. The platform also offers a feature that sets aside the money for, and facilitates, the quarterly tax payments, for example. It also offers real-time business and tax reports, so when a business owner swipes their card, expenses are reflected in real time.

Sequoia’s Josephine Chen and Alfred Lin said they were impressed with Myrick from their first call with her.

“Lauren has incredible context and command of the details. She talked about the hoops self-employed people have to jump through to fill out their Schedule Cs; she explained some of the finer points of different tax codes — and we were riveted,” the pair say.

Lin said he was particularly intrigued by the concept of Found because while he was in graduate school he ran a small data analysis business on the side.

“I had to invoice, report on taxes and do my own bookkeeping,” he recalls. “And I kept it together with a spreadsheet. I thought to myself that there should be better tools to do some of this stuff. And that is what Lauren has done with Found.”

&Open raises $7.2M from First Round Capital and LocalGlobe to send gifts at scale

We live in a world where companies have to send out ‘gifts’ to individuals. Chocolate bars. Bottles of wine. You name it. Companies are gifting it. But right now, that operation is buried in a marketing department on a spreadsheet, as is mostly pretty disorganized.

A handful of startups realized it could be done better and at scale, among them Sendoso (which has raised $52.7M) and ReachDesk ($6M).

Joining this clan is a startup with the tortuous name of “&Open” (yes, ‘ampersand open’, pronounced ‘And Open’ for those of you at the back).

Suffice it to say, that despite its name it’s raised $7.2 million to makes it easier for brands to send carefully gifts to customers to boost loyalty and engagement. First Round Capital and LocalGlobe led the Seed round along with participation from angel investors including Andrew Robb (Farfetch), Des Traynor (Intercom) and Liam Casey (PCH). The funds will be used to scale to Europe and the US. Currently &Open claims to deliver more than 3,500 gifts every week.

Dublin-based &Open launched in 2017 and was founded by Ciara Flood, formerly buyer at Net-a-Porter and part of the founding team at Mr Porter, together with her husband Jonathan Legge, and her and brother-in-law, Mark Legge. The brothers previously founded the high-end gift and homeware venture Makers & Brothers.

&Open (please God, take me now…) counts Airbnb, Spotify, and Peloton among their customers.

Gifting can be powerful. According to one study which the company cites, customers who feel emotionally connected to a brand have been shown to create a 306% higher lifetime value. This is in stark contrast to existing, traditional Meanwhile, Schemes like corporate gifts, branded merchandise, loyalty programmes, and vouchers don’t work, claims &Open.

Jonathan Legge said: “Customers will choose brands who prioritize care and connection over transactional relationships. A thoughtful gift can make all the difference — both for a customer’s experience and their advocacy and loyalty to a brand.”

Hayley Barna, Partner at First Round Capital, said: “Gone are the days of relying on a points-based loyalty scheme to keep your customers engaged and happy. Brands increasingly need to work harder to retain customers and &Open provides an elegant solution to this conundrum.”

Uncapped, which provides upfront revenue to digital companies, raises $80M in funding

Buzzy US startup Pipe — which claims to be the “Nasdaq for revenue” — has just raised $250 million at a $2 billion valuation? The secret for the hype? It gives SaaS companies a way to get their revenue upfront, by “pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts”, as my colleague Mary Ann Azevedo so eloquently put it.

Virtually the same model is about to hit Europe in various guises, and the newest of the crop will be Uncapped, a London-based startup that plans to extend the model not just to SaaS companies but also to the booming sector of E-commerce.

It’s now raised an $80 million combined funding round of debt and equity to launch a suite of banking services tailored to the needs of this new wave of tech-driven companies. The round was led by Lakestar. Uncapped’s previous investors include All Iron Ventures, White Star Capital, Global Founders Capital, and Mouro Capital.

The company plans to use the cash to move into the banking space, with new products and services. Last year, the company began issuing Visa cards.

Founded in 2019, Uncapped is positioned as an alternative to traditional debt financing and venture capital, providing companies with growth finance for a flat fee which goes down to 6%, and fast-released capital. Businesses repay the capital as they make revenue. There is no set repayment and no compounding interest, equity, or personal guarantees. There are even no credit checks or business plans required.

Uncapped arrives at an opportune moment. The pandemic has led to an e-commerce boom, but the sector requires much more capital than existing VCs can provide. Legacy banks don’t ‘get’ new entrepreneurs. Neo Banks are trying to provide it, but can still be slow.

Piotr Pisarz, Co-Founder of Uncapped, said: “Digital companies are innovating and evolving faster than ever before, but their legacy banking providers are not keeping up with the pace. We want to help digital entrepreneurs with quick access to funding, insights that help their business grow, rewards they actually care about, and modern integrations that will save them time and money.”

“The reality is that legacy banks don’t really understand the needs of digital entrepreneurs, and their dated infrastructure is not up to the standards required to help their business grow. So it’s no surprise that 82% of business owners say they are unhappy with their bank,” Asher Ismail, Co-Founder of Uncapped, added.

Nicolas Brand, Partner at Lakestar, said: “The composition of our economies is changing, with digital native businesses contributing an ever-increasing share to overall GDP. Uncapped uses real-time data provided by its clients across APIs to offer bespoke credit and other novel banking services.”

Payroll automation startup raises $15.6M Series A led by General Catalyst

Payroll automation is not exactly the sexiest of startup areas but it’s a pretty decent business. The larger startup in the space is Payfit which has raised upwards of $208.4M to do something that lots of companies find quite painful. But Payfit does a lot of other things as well, potentially leaving it exposed. Now a startup aims to come along and hone in on the thorny issue of payroll automation, alone.

Founded by Jonas Bøgh Larsen and Emil Hagbarth Rasmussen, Danish firm Pento has raised $15.6 million in a Series A funding led by General Catalyst. Also participating was Avid Ventures and the UK’s LocalGlobe. Existing investors Point Nine Capital, Moonfire Ventures, Hustle Fund, and Seedcamp also took part, alongside angels (see below). This latest funding takes the total raised by Pento to $18.4 million.

The startup claims 700 companies are using it including tech firms Pleo and Cuvva; large hospitality brands (Honest Burgers); and retail and e-commerce brands (Lacoste, Beauty Pie). Pento replaces spreadsheets etc and gives them cloud-based tools, real-time calculations, transparency, and online and telephone support.

Pento co-founder and CEO, Jonas Bøgh Larsen told me: “The biggest process we’re replacing is payroll outsourcing where companies are outsourcing payroll to an accountant, which the vast majority of companies do in Europe. We automate the entire process from reporting to tax calculations to payments. So, what most other platforms or payable products do is basically just helping you calculate the right taxes and National Insurance, and so on. We also take care of the reporting. We also do payments, and we integrate the product to other HR products.”

Adam Valkin, Managing Director at General Catalyst said: “Despite being so business-critical, payroll is one of the least digitally advanced services across the globe. It’s also one that has garnered a reputation for being too complex, too convoluted and too out of reach for those who aren’t payroll specialists, leading many to consider expensive outsourcing as the only route to go. Pento dispels this myth because it’s built purely with HR and finance teams in mind, by business leaders who truly understand the frustrations involved. It’s easy-to-use, transparent, flexible, secure and affordable. It’s what payroll should be in a modern company and it represents the future of employee compensation.”

Pento’s angel are from Stripe (Thairu and Diede van Lamoen), Monzo (Tom Blomfield), GoCardless (Matt Robinson), Zoom (Eric Yuan), Cuvva (Freddy Macnamara), Intercom (Des Traynor) and others.

Settle raises $15M from Kleiner Perkins to give e-commerce companies more working capital

Alek Koenig spent four years at Affirm, where he was head of credit.

There he saw firsthand just how powerful the alternative lending model could be. Koenig realized that it wasn’t just consumers who could benefit from the model, but businesses too.

So in November 2019, he founded Settle as a way to give e-commerce and consumer packaged goods (CPG) companies access to non-dilutive capital. (Not every company wants to raise venture money). By June 2020, the startup had launched its platform, which is designed to help these businesses manage their cash flow. Over time, he recruited a previous co-worker, Shane Moriah, to serve as Settle’s CTO.

And today, the company is announcing that it has raised $15 million in a Series A funding round led by Kleiner Perkins. This follows a previously unannounced $6 million seed raise led by Founders Fund in November 2020. Other investors in the company include SciFi (Affirm founder Max Levchin’s VC firm), Caffeinated Capital, WorkLife Ventures, Background Capital and AngelList Venture CEO Avlok Kohli.

With the pandemic leading to a massive shift toward digital and online shopping, ecommerce and CPG businesses found themselves with the challenge of keeping up with demand while trying to manage their cash flow. The main problem was the lag between accounts receivables and accounts payables.

“These companies suffer from the problem where there are these huge cash flow gaps from buying inventory, waiting to receive it and then turning it into revenue,” Koenig explains. “It takes quite a bit of time for these customers to actually get revenue from all those inventory purchases they need to make. What we do is make it really easy for companies to pay their vendors with extended payment terms.”

Settle does this by automatically syncing to a business’ accounting software and combining that with working capital products it’s developed.

Put simply, Settle will pay a vendor, and then brands can pay Settle back when they turn that COGS (cost of goods sold) into revenue. The startup says it also saves brands money on expensive wire fees.

Image Credits: Settle

“Businesses really value getting cash sooner, so they can use it in their operations,” Koenig said. “We’ve worked to reimagine the CFO suite for brands, starting with integrated financing and bill pay solutions.”

The concept of non-dilutive capital is not a new one with other startups tackling the space in different ways. For example, Pipe aims to give SaaS companies a way to get their revenue upfront, by pairing them with investors on a marketplace that pays a discounted rate for the annual value of those contracts.

Settle is focused on the e-commerce vertical, and building a unique product for that category, Koenig says, rather than trying to build a product aimed for several different industries.

“We don’t want to be a mediocre product for everybody,” he told TechCrunch. “But rather a phenomenal product for this vertical.”

Since its launch last June, Settle has seen its business jump by 1000% although it’s important to note that’s from a small base. Settle is currently working with over 300 brands including baby stroller retailer Lalo, Spiceology and men’s skincare brand Disco. So far, all of its growth has been organic.

“Last year when the pandemic hit, offline retail shut down and ecommerce got a big boost. But that meant that a lot of these companies were running out of orders and were out of stock on many items, so they were just kind of leaving money on the table,” Koenig said. “Once they started using us, they were able to buy more inventory, so we actually help them make more profit, and not just create more sales.”

His reasoning for that last statement is that by giving these businesses the ability to purchase items in bulk, they could get cheaper price per unit costs as well as cheaper shipping costs.

The company is planning to use its new capital in part to grow its team of 20, as well as raise more debt so that it can continue lending money to businesses.

Kleiner Perkins’ Monica Desai Weiss said her firm believes that Koenig and CTO Moriah’s expertise in underwriting, capital markets and e-commerce give the pair “a rare skill set that’s unique to their market.”

She’s also drawn to the company’s embedded approach.

“Whereas most lending businesses are fairly transactional and opportunistic, Settle becomes deeply embedded in the way their merchants forecast and grow,” she told TechCrunch. “That approach has demonstrated inherent virality and their timing is perfect — the past year has changed consumer behaviors permanently and also produced massive opportunities for global entrepreneurship via ecommerce. In that way, we see the umbrella of e-commerce expanding massively in the coming years, and we believe Settle will be key to enabling that shift.”

Final-mile fulfillment startup parcelLab closes $112M Series C funding led by Insight Partners

Munich-based parcelLab, which offers a final-mile fulfillment service for online retailers, has closed a $112 million (GB£80 million) Series C funding round led by the US VC/PE firm Insight Partners.

Germany’s Endeit Capital participated as a co-investor, alongside existing investors Capnamic Ventures and coparion. parcelLab last raised an undisclosed Series B in October 2019. The new funding will feed into parcelLab’s global expansion plans and new product development.

Founded in 2015 by Tobias Buxhoidt (CEO), Julian Krenge (CTO), and Anton Eder (COO), the startup has managed to bag such customers as Lidl, to which it provides automated personalized shipping messages. This means that as much as 85% of Lidl customers return to its website.

It also works with IKEA and Farfetch to increase basket sizes and email open rates of – it claims – over 90%, 25% reductions in WISMO (where is my order), and increases of customer reviews.   

In a statement Tobias Buxhoidt, CEO and Founder of parcelLab, said: “As e-commerce becomes increasingly competitive, providing unique and branded experiences will drive growth. Identifying opportunities to further connect with people and build a better, stronger relationship is a key differentiator.”   
 
Matt Gatto, Managing Director at Insight Partners, said: “We pride ourselves in identifying and investing in software ScaleUp companies that are driving transformative change in their industries. In parcelLab, we see true potential to transform how brands and people connect.”

Endeit only recently raised a €250 million fund to invest in B-stage European startups, so this is its most recent deployment of capital.

Philipp Schroeder Partner at Endeit commented: “ParcelLab’s team is the perfect example of internet entrepreneurs that we want to support – entrepreneurs who can drive the change to make Europe more competitive and who have the ambition to become global market leaders.” 

ParcelLab’s main competitor is US-based Narvar which has raised $64M, with its last round being a Series C funding.

TechCrunch Survey of Scottish Tech Hubs: Edinburgh, Glasgow, Dundee, Aberdeen

TechCrunch is embarking on a major new project to survey European founders and investors in cities outside the larger European capitals.

Over the next few weeks, we will ask entrepreneurs in these cities to talk about their ecosystems, in their own words.

This is your chance to put Edinburgh, Glasgow, Dundee, Aberdeen on the Techcrunch Map!.

If you are a tech startup founder or investor in one of these cities please fill out the survey form here.

We are particularly interested in hearing from women founders and investors.

This is the follow-up to the huge survey of investors (see also below) we’ve done over the last six or more months, largely in Europe’s biggest capital cities.

These formed part of a broader series of surveys we’re doing regularly for ExtraCrunch, our subscription service that unpacks key issues for startups and investors.

In the first wave of surveys, the cities we wrote about were largely capitals. You can see them listed here.

This time, we will be surveying founders and investors in Europe’s other cities to capture how European hubs are growing, from the perspective of the people on the ground.

We’d like to know how your city’s startup scene is evolving, how the tech sector is being impacted by COVID-19, and generally how your city will evolve.

We leave submissions mostly unedited and are generally looking for at least one or two paragraphs in answers to the questions.

So if you are a tech startup founder or investor in one of these cities please fill out our survey form here.

Thank you for participating. If you have questions you can email [email protected] and/or DM on Twitter to @mikebutcher.

HoneyBook raises $155M at $1B+ valuation to help SMBs, freelancers manage their businesses

HoneyBook, which has built out a client experience and financial management platform for service-based small businesses and freelancers, announced today that it has raised $155 million in a Series D round led by Durable Capital Partners LP.

Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing backers Norwest Venture Partners and Citi Ventures also participated in the financing, which brings the New York-based company’s valuation to over $1 billion. With the latest round, HoneyBook has now raised $215 million since its 2013 inception. The Series D is a big jump from the $28 million that HoneyBook raised in March 2019. 

When the COVID-19 pandemic hit last year, HoneyBook’s leadership team was concerned about the potential impact on their business and braced themselves for a drop in revenue.

Rather than lay off people, they instead asked everyone to take a pay cut, and that included the executive team, who cut theirs “by double” the rest of the staff.

“I remember it was terrifying. We knew that our customers’ businesses were going to be impacted dramatically, and would impact ours at the same time dramatically,” recalls CEO Oz Alon. “We had to make some hard decisions.”

But the resilience of HoneyBook’s customer base surprised even the company, who ended up reinstating those salaries just a few months later. And, as corporate layoffs driven by the COVID-19 pandemic led to more people deciding to start their own businesses, HoneyBook saw a big surge in demand.

“Our members who saw a hit in demand went out and found demand in another thing,” Oz said. As a result, HoneyBook ended up doubling its number of members on its SaaS platform and tripling its annual recurring revenue (ARR) over the past 12 months. Members booked more than $1 billion in business on the platform in the past nine months alone. 

HoneyBook combines tools like billing, contracts, and client communication on its platform with the goal of helping business owners stay organized. Since its inception, service providers across the U.S. and Canada such as graphic designers, event planners, digital marketers and photographers have booked more than $3 billion in business on its platform. And as the pandemic had more people shift to doing more things online, HoneyBook prepared to help its members adapt by being armed with digital tools.

Image Credits: HoneyBook

“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online, that they were used to receiving from business owners in person,” Alon said.

Oz and co-founder/wife, Naama, were both small business owners themselves at one time, so they had firsthand insight on the pain points of running a service-based business. 

HoneyBook’s software not only helps SMBs do more business, but helps them “convert potentials to actual clients,” Oz said.

“We help them communicate with potential clients so they can win their business, and then help them manage the relationship so they can keep them,” Naama said.

The company plans to use its new capital toward continued product development and to “dramatically” boost its 103-person headcount across its New York and Tel Aviv offices.

“We’re seeing so much demand for additional services and products, so we definitely want to invest and create better ways for our members to present themselves online,” Alon told TechCrunch. “We’re also seeing demand for financial products and the ability to access capital faster. So that’s just a few of the things we plan to invest in.”

The company also wants to make its platform “more customizable” for different categories and verticals.

Chelsea Stoner, general partner at Battery Ventures, said her firm recognized that the expansive market of productivity tools to serve small businesses and entrepreneurs was “a market of discrete and separate productivity tools.”

HoneyBook, she said, is a true platform for SMBs, “providing a huge array of functionality in one cohesive UX.”

“It unites and connects every task for the solopreneurs, from creating and distributing marketing collateral, to organizing and executing proposals, to sending invoices and collecting payments,” Stoner said. “The company is constantly innovating and iterating in response to its members; we also see a lot of opportunity with payments going forward…And, due to Covid-19 and other factors, the company is sitting on pent-up demand that will accelerate growth even more.”