Collective Raises $20M to Support Self-Employed Professionals

The Rise of Support for Self-Employed Professionals

The “creator economy” and pandemic-related economic shifts have spurred significant growth in the self-employed sector. Consequently, Collective, a subscription platform designed to manage administrative tasks for independent workers, has secured $20 million in Series A funding just months after its initial launch.

Funding Details and Key Investors

General Catalyst spearheaded this funding round, with participation from Sound Ventures, the venture capital firm established by Ashton Kutcher and Guy Oseary. To date, Collective’s total funding reaches $28.65 million.

A diverse group of prominent individuals also contributed to the investment, including:

• Steve Chen (YouTube founder)
• Hamish McKenzie (Substack founder)
• Aaron Levie (Box founder)
• Kevin Lin (Twitch founder)
• Sam Yam (Patreon founder)
• Shadiah Sigala (HoneyBook founder)
• Adrian Aoun (Forward founder)
• Holly Liu (Kabam founder)
• Andrew Dudum (Hims founder)
• Edward Hartman (LegalZoom founder)

A Platform for Entrepreneurial Freedom

Ashton Kutcher articulated his support, stating the company empowers creators by streamlining back-office operations, reducing friction for new entrepreneurs. He expressed a desire for such a service during his own early ventures.

Collective’s Core Services

Founded in September 2020 by Hooman Radfar, Ugur Kaner, and Bugra Akcay, Collective provides customized financial services and access to expert advisors. These advisors oversee crucial areas like accounting, tax preparation, bookkeeping, and business formation.

Currently, 59 million individuals in the U.S. – representing 36% of the national workforce – are self-employed and typically handle all administrative duties themselves. Collective aims to serve as their comprehensive online back-office solution.

Addressing an Underserved Market

Radfar explained that the fintech market often prioritizes established companies and growing small-to-medium businesses. “Platforms like Pilot have excelled at providing back-office support for startups,” he noted. “Our focus is on delivering comparable value to the often-overlooked ‘business-of-one’ community, which constitutes the largest segment of founders nationwide.”

He further elaborated: “Prior to Collective, independent professionals frequently relied on a patchwork of DIY tools – QuickBooks, Gusto, and LegalZoom – to manage their administrative tasks. Those who could afford it often engaged a part-time accountant for guidance. Collective simplifies financial management by integrating these tools into a single platform and offering expert support to maximize tax savings.”

Projected Growth in the Freelance Economy

Estimates suggest that the number of independent freelancers in the U.S. will reach 86.5 million by 2027, constituting 50% of the American workforce. This represents a projected growth rate three times faster than that of the traditional employment sector.

General Catalyst’s Perspective

Niko Bonatsos, managing director at General Catalyst, emphasized Collective’s role in serving the $1.2 trillion “business-of-one” industry. He highlighted the platform’s ability to save individuals both time and money, while equipping them with the necessary tools and resources for success. General Catalyst is enthusiastic about supporting Collective’s expansion and the development of its services for the self-employed community.