HoneyBook, which has developed a customer experience and financial management platform for service-minded 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 and existing backers Norwest Venture Partners and Citi Ventures also contributed to the funding, bringing the San Francisco-based company’s valuation to over $ 1 billion. With the latest round, HoneyBook has now raised $ 248 million since it was founded in 2013. The Series D is a giant leap from the $ 28 million HoneyBook raised in March 2019.
When the COVID-19 pandemic broke out last year, HoneyBook’s leadership team was concerned about the potential impact on their business and prepared for a drop in sales.
Instead of firing people, they instead asked everyone to cut their salaries, including the executive team, which cut theirs by “double” the rest of the staff.
“I remember it was terrifying. We knew our customers’ business would be dramatically affected, and ours too, ”recalls CEO Oz Alon. “We had to make some tough decisions.”
But the resilience of HoneyBook’s customer base surprised even the company, which reinstated those salaries just months later. And, As corporate layoffs caused by the COVID-19 pandemic resulted in more people choosing to start their own business, HoneyBook saw a sharp surge in demand.
“Our members who saw one popular hit went out and found demand on something else,” said Oz. As a result, HoneyBook doubled its membership on its SaaS platform and tripled its annual recurring revenue (ARR) in the past 12 months. Members have booked more than $ 1 billion in deals on the platform in the past nine months alone.
HoneyBook combines tools such as billing, contracts and customer communications on its platform with the aim of helping business owners stay organized. Since its inception, service providers in the United States and Canada such as Graphic designers, event planners, digital marketers and photographers booked more than $ 3 billion in deals on their platform. And as the pandemic pushed more people to do more things online, HoneyBook prepared to help its members customize by equipping it with digital tools.
“Customers now expect streamlined communication, seamless payments and the same exceptional online service that business owners have come to expect,” said Alon.
Oz founded HoneyBook with his wife Naama and longtime friend Dror Shimoni. Oz and Naama were both once small business owners themselves, so they had firsthand insight into the weaknesses of running a service-based business.
HoneyBook’s software not only helps SMBs do more business, it also helps them “convert potentials into actual customers,” said Oz.
“We help them communicate with prospects so they can win their business and then help them manage the relationship so they can keep it,” said Naama.
The company plans to use its new capital for more Product development and the “dramatic” increase in the number of 103 employees in the branches in San Francisco and Tel Aviv.
“We’re seeing so much demand for additional services and products, so we definitely want to invest and give our members better opportunities to present themselves online,” Alon told TechCrunch. “We are also seeing a demand for financial products and the ability to access capital more quickly. These are just some of the things we want to invest in. “
The company also wants to make its platform more “customizable” for different categories and industries.
Chelsea Stoner, general partner at Battery Ventures, said her company recognized that the expansive market for productivity tools for small businesses and entrepreneurs was “a market for discrete and separate productivity tools.”
HoneyBook, she said, is a real platform for SMBs and “offers a huge range of functions in a cohesive UX”.
“It unites and connects all the tasks of the solo preneurs, from creating and distributing marketing materials to organizing and executing offers to sending invoices and collecting payments,” said Stoner. “The company is constantly innovating and iterating in response to its members; We also see many opportunities in future payments … And due to COVID-19 and other factors, the company is sitting on a backlog that will accelerate growth even further. “