Collective, the pioneering online back-office platform designed exclusively for individual entrepreneurs, known as ‘solopreneurs’, has successfully raised $50m in its latest funding round.
The substantial investment was pooled by a variety of investors including Gradient Ventures, Google’s AI fund, Innovius Capital, The General Partnership, General Catalyst, QED, Expa, and Better Tomorrow Ventures, amongst others. Collective plans to utilise this newfound capital to expedite the implementation of AI across its operations and rapidly onboard the nearly 100,000 businesses currently on its waitlist.
The services offered by Collective span business formation, S-election, payroll, tax, and bookkeeping, tailored for Businesses-of-One. It also provides a personal dashboard for freelancers to manage their finances, helping them save an average of $10,000 per annum. With the freelance industry now encompassing 39% of the US workforce, a figure projected to cross the halfway mark by 2027, the demand for Collective’s services is skyrocketing.
To accommodate this growing demand, Collective has ingeniously incorporated technologies such as Large Language Models (LLMs) to build AI co-pilots, streamlining its operations across the team of tax experts, accountants, bookkeepers, and relationship managers. With the new funding, the company can create more AI tools, enabling a seamless scale of operations and outpacing its original growth projections.
Collective CEO and co-founder Hooman Radfar said, “We’re building the financial operating system for one of the fastest-growing segments of the US economy, the freelance workforce. Businesses-of-One generate $1.4trn in revenue yet have been underserved by traditional back-office software and service providers. AI is allowing us to solve that problem faster and help more solopreneurs launch and grow their businesses.”
Radfar added, “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. The first billion-dollar Business-of-One may have already been born.”
General Partner at Gradient Ventures, Darian Shirazi, added his perspective, “Large language models will enable operationally-intensive processes to scale more quickly and with lower cost. Collective’s complex workflows and proprietary data uniquely position them to leverage AI to disrupt the tax and accounting market.”
Collective has grown significantly since its Series A round in 2021, expanding nationwide and nearly tenfold revenue growth. In total, since its inception in 2020, Collective has managed to raise $82m.
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