On Thursday, Austin-based ZenBusiness announced the close of a $55 million Series B funding round.
The news caught our attention for a few reasons. For one, ZenBusiness’ mission is to help budding entrepreneurs “start, run, and grow their own successful micro businesses” via its digital platform. Any company that supports entrepreneurship is compelling, especially as more people lose their jobs due to the COVID-19 pandemic.
This year, ZenBusiness has seen 100% growth in large part due to the U.S. being “in the middle of a micro business renaissance,” according to CEO Ross Buhrdorf. Since the platform launched in 2018, more than 80,000 micro businesses have launched using the ZenBusiness platform.
“A trend that we have seen over the past couple of years is that more and more people are re-assessing their professional lives and making the move to become entrepreneurs,” Buhrdorf told FinLedger. “With the onset of the coronavirus, this trend has accelerated.”
In fact, according to a September 2020 Upwork report, two million Americans have started freelancing in the past 12 months due to the pandemic.
The company started as a business filing service and has since evolved to be a technology and educational resource platform to support micro businesses and entrepreneurs, noted Buhrdorf.
Entrepreneurs can use ZenBusiness’s service to file their business, stay compliant, and create a custom website, among other services. Customers are mostly U.S.-based service businesses, such as moving companies, therapists, and digital marketers, for example.
From a fintech perspective, ZenBusiness’s latest round also stood out because of the company’s plans to use its new capital in part to grow its ZenBusiness Money unit.
In July, ZenBusiness acquired fintech platform Joust with the goal of launching ZenBusiness Money later this year. The goal for the new unit to provide a “simple, all-inclusive toolkit featuring invoicing and payments solutions, and merchant services” to platform users. Since the acquisition, ZenBusiness has been integrating Joust’s enterprise-quality financial tools to its platform.
Founded in 2017, Joust was designed specifically to address the financial needs of micro businesses and provide small business entrepreneurs who did not have a business bank account with a robust financial toolkit. The goal of ZenBusiness Money is to provide a full suite of business banking solutions typically reserved for large companies that integrates “seamlessly” within the ZenBusiness product ecosystem.
“We believe ALL entrepreneurs should have access to the same banking services reserved for large companies,” said Lamine Zarrad, former CEO & co-founder of Joust, and now heading up all financial services at ZenBusiness, at the time of the acquisition. “By bringing our financial tools to the ZenBusiness platform, we will quickly scale up and empower even the smallest businesses by simplifying and strengthening their daily operations while protecting their interests.”
ZenBusiness – a Public Benefit Corporation – has doubled its headcount over the past year, and continues to actively hire, Buhrdorf said.
Cathay Innovation led the latest round of funding, which brings ZenBusiness’s total raised to $75 million. GreatPoint Ventures, Breyer Capital, Omega Venture Partners, Greycroft,, Lerer Hippeau Ventures, Interlock Partners, Adam Zeplain’s mark vc, and ATX Venture Partners also participated in the financing.