Honeybook Doubles Valuation - Funding News & Independent Worker Payments

The Rise of Independent Worker Support: HoneyBook Secures $250 Million

With a growing number of individuals embracing independent work, investment in startups catering to their needs is increasing. HoneyBook recently announced a new funding round, raising $250 million in Series E financing. This follows a $155 million Series D round secured just six months prior.

Valuation and Company Overview

This latest investment elevates the San Francisco-based company’s valuation to $2.4 billion, as confirmed by HoneyBook CEO Oz Alon in an email to TechCrunch.

HoneyBook provides software designed to help business owners streamline operations, manage client relationships, and optimize cash flow. Its suite of tools includes integrated financial services, such as payment processing and a recently introduced capital product.

New Capital Product and Funding Details

The new capital product offers eligible members access to funding for business expansion. Repayment is seamlessly integrated into existing transaction workflows.

Tiger Global Management led this funding round, increasing their previous investment. Durable Capital Partners, who spearheaded the Series D, along with Norwest Venture Partners, Citi Ventures, and OurCrowd, also participated in the round.

The "Great Resignation" and the Growth of Entrepreneurship

Shifting Labor Trends

The U.S. Bureau of Labor Statistics’ Job Openings and Labor Turnover survey indicates that approximately 20 million people voluntarily left their jobs between April and August 2021 – a period often referred to as the “Great Resignation.”

Simultaneously, the Census Bureau reported over 4 million new business applications filed between January and September of the same year.

Increased Demand for Supporting Software

“This surge has created a greater need for software solutions that address the unique requirements of independent business owners,” Alon stated. “They require a platform to effectively manage both their client interactions and their finances, and HoneyBook delivers that functionality.”

Furthermore, evolving perceptions regarding the value of work are contributing to a greater willingness among businesses to engage independent contractors, he explained.

HoneyBook’s Impressive Growth

This shift in the labor market has resulted in a doubling of HoneyBook’s annual recurring revenue since the beginning of 2021. The company has also experienced a more than twofold increase in new subscribers over the past year.

HoneyBook’s members have also seen significant success, collectively booking over $1.8 billion through the platform in 2021, bringing the total bookings since the company’s 2013 launch to over $5 billion.

Future Plans and Market Competition

Accelerated Funding and Investor Confidence

HoneyBook hadn’t initially planned to raise capital so quickly, but existing investors, recognizing the company’s growth and the increasing number of independent workers, sought to “strengthen their partnership,” according to Alon.

“They recognized the potential before us and chose to reinforce their investment in our mission to empower independent businesses,” he added. “We are fortunate to have the support of a strong investor community that shares our principles and aligns with our long-term vision.”

Competitive Landscape

HoneyBook is not the only company focusing on the independent worker market. Contra, a professional network for freelancers, recently raised $30 million in Series B funding. Lean secured $4.5 million in seed funding to provide financial products for gig workers. All Day Kitchens and Owner.com have also attracted investment for similar initiatives, specifically within the restaurant industry.

Focus on Financial Services and Talent Acquisition

Looking ahead, HoneyBook intends to expand its offerings of financial services. The new funding will be allocated to product development and accelerating the release of new features, Alon stated.

“We understand that cash flow represents a significant challenge for many independent businesses,” he added. “To achieve this, we must also continue to attract top talent, and we are currently hiring for numerous positions across our teams in the U.S. and Israel. We have ambitious goals for 2022 and beyond as we continue to support the independent business sector.”