Collective Raises $50M to Become First AI-Powered Finance Platform for Freelancers
SAN FRANCISCO, July 11, 2023 (GLOBE NEWSWIRE) -- Collective, the first all-in-one online back-office platform for solopreneurs, announced it has raised $50M from a syndicate of investors including Gradient Ventures, Google’s AI fund, Innovius Capital, The General Partnership, General Catalyst, QED, Expa, and Better Tomorrow Ventures, among others. Collective will use the investment to accelerate AI deployment across its operations and quickly onboard the nearly 100K businesses on its waitlist.
Collective provides business formation, S-election, payroll, tax, and bookkeeping services for Businesses-of-One, as well as a personal dashboard to manage their finances—saving its members an average of $10,000 per year. The need for Collective’s services has grown dramatically as freelancing has boomed: 39% of the US workforce now participates in freelance work, a proportion projected to increase to over 50% by 2027.
To meet the demand, Collective has harnessed technologies like Large Language Models (LLMs) to build AI copilots for its team of tax experts, accountants, bookkeeper, and relationship managers. These copilots dramatically reduce the time needed to complete processes such as bank reconciliation (by 70%) and expense categorization (by 90%). With its new funding, Collective will be able to develop additional AI tools, smoothly scale its operations, and grow twice as fast as originally projected.
“We’re building the financial operating system for one of the fastest-growing segments of the US economy, the freelance workforce,” said Hooman Radfar, CEO and co-founder of Collective. “Businesses-of-One generate $1.4 trillion in revenue yet have been underserved by traditional back-office software and service providers. Their options are to use a patchwork of pricey tools, hire a team of advisors — made harder by a growing accountant shortage — or do all the finance and payroll work themselves. Countless entrepreneurial success stories are being held back by paperwork. AI is allowing us to solve that problem faster and help more solopreneurs launch and grow their businesses.”
“What’s more, AI will also accelerate the growth of the freelance economy. A single person can now scale a business to levels never before imagined,” added Radfar. “The first billion-dollar Business-of-One may have already been born.”
“Large language models will enable operationally-intensive processes to scale more quickly and with lower cost. Collective is harnessing this capability by applying AI to the process of bookkeeping, accounting, and reconciliation, allowing them to accumulate a significant advantage over incumbents,” said Darian Shirazi, General Partner at Gradient Ventures. “Collective’s complex workflows and proprietary data uniquely position them to leverage AI to disrupt the tax and accounting market.”
Collective has expanded nationwide and increased revenue by nearly 10x since its Series A round in 2021. In total, since its launch in 2020, the company has raised $82 million.
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