Lili, a neobank aimed at freelancers, raises $55M as it passes 200K users – TechCrunch
A startup that built a neobank specifically to meet the needs of freelancers and sole proprietorships has embarked on a growth spurt to keep its business growing after its usage increased 1,500% in a year.
Lili, who gives freelancers the ability to manage both their work and personal financial life from a single account, along with tools to help meet the unique financial and accounting needs that come with a one-person business, raised $ 55 million in a Series B round that will continue to expand its platform.
Today the company already offers users a single account and payment card that can be used for both personal and business expenses, as well as an “assistant” that analyzes the expenses and budget for paying future taxes based on your income. In the future, it will also expand into the areas of invoicing, payment management and loans (e.g. loans or cash advances) for its customers.
“This is about financial services for freelancers,” said co-founder and CEO Lilac Bar David in an interview. “We’re redefining a new type of user who stands between consumers and businesses and has specific needs. If you look at the economy and what the future of work will look like, this really needs to be addressed. “
Based in New York and Israel, Lili is primarily focused on the US market, where Bar David said the opportunity is big enough to keep Lili busy for some time. It is estimated that 40% of workers are currently self-employed, and this proportion is expected to rise to just over 50% of all employed persons by 2027.
The funding will be led by Group 11, a VC with a strong focus on fintech that also includes Target Global, AltaIR and previous investors. (That list of previous supporters includes Zeev Ventures, Foundation Capital, and the Google for Startups Accelerator.) The company has now raised $ 80 million and is not yet announcing its valuation.
Started in January 2020, shortly before the pandemic really started, Lili has picked up 200,000 customers to date, Bar David tells me.
In some cases, people have been forced to pause their normal activities, such as when a public venue such as a theater had to temporarily close its doors. In others, they were simply laid off because companies no longer appeared profitable. In both cases, this resulted in a sudden surge in people using their skills to enter into entrepreneurship to make a living, rather than trying to apply for a new full-time job during the pandemic.
It turned out to be a particularly acute emergency for women. More than 5 million women lost their jobs in the wake of the pandemic, Bar David said, and many of them turned to freelance jobs. Lili says more than half, nearly 60%, of new users are women.
“We were definitely in the right place at the right time,” she says. “Covid not only had an impact on the professional economy, it also meant no access to bank branches. That meant a greater willingness to accept a service like ours, and it had a big impact. “
Going freelance – whatever your actual skills or occupation – has a lot to recommend it.
You are, as they say, your own boss: you can choose what hours you work, what tasks you take on, how you carry them out, and whether you want to get promoted to other things without worrying about whether your manager will or maybe worst of all, ignore or dismiss it. You only have your own motivation and your luck to praise or constructively criticize or sympathize with yourself in your annual reviews.
But – and I can say that from very direct experience – it can also be a real pain in the ass.
You need to think about how to manage your time healthily and not try too hard or panic when there is too little work. You are constantly fighting for your own corner when your service providers exploit or underpaid you, understanding that if you push back too much you may become completely unemployed. You may not get the opportunities and work you hoped for and then you won’t get paid for the shots you never get.
Before the significant effort you must put into effectively becoming your own CEO.
This includes tracking your expenses, deciding how to break down things you spend money on to balance them with your taxes, and of course budgeting each month based on your income and using that budget that way that it makes the most sense to you as a consumer in the world and you as an entrepreneur. And if that kind of stuff isn’t your strongest point, then that’s tough. You have to do it anyway.
Lili is an interesting and catchy idea as she identifies all of these transaction issues and creates tools to help people deal with all of these issues.
It’s not just about having a business card to manage payments, it’s a more complete system that tracks your expenses and learns from them to give you advice on managing your taxes and what to withhold each month to pay for income tax returns and more. Usually freelancers either do this on the fly from their personal accounts or set up separate business accounts to try to manage it, but none of these options really provide a clean and easy-to-use user experience.
Over time, there are plans to add more tools and integrate them with a wider range of third-party applications that freelancers may use to bill customers or pay bills themselves. It already has integrations with Venmo and QuickBooks, with more to come, said Bar David, “wWhatever a self-employed person needs to be successful, ”she said.
There are dozens of neobanks out there now, but Lili’s particular focus on these self-employed freelancers has helped her stand out.
“We expect the freelance economy will continue to grow robustly well beyond the tailwinds of the pandemic,” Dovi Frances, founding partner of Group 11, said in a statement. “Lili is poised to see exponential growth by continuing to provide these demographically critical, effective and intuitive tools to manage what was previously an extremely complex and inefficient way of doing business.”
And to be honest, Lili isn’t the only neobank out there targeting freelancers – others include all the usual neobanks as well as specialists like Lance Bank – but she puts everything in her technique to try to be the most effective and effective for herself best to do it.