- New startup Collective, founded by serial entrepreneur Hooman Radfar, has raised $8.65 million from General Catalyst and QED without a pitch deck.
- The company aims to help “businesses-of-one” or freelancers struggling with the administration of running a business in the US.
- “The one thing in common from these experiences is that running a business is really hard, businesses of one are booming and yet there are still so many pain points to address,” Radfar told Business Insider in an interview.
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The coronavirus pandemic has brought into sharp relief the extent to which freelancers and small business owners make up the US economy.
It’s estimated that freelancers make up 36% of the US workforce, contributing some $1.2 trillion to the economy annually.
COVID-19 is accelerating the shift to freelancing, as record unemployment and a widespread move to remote work is making freelancing more popular, according to Hooman Radfar, the founder and CEO of Collective, a startup launching to help individuals and entrepreneurs.
Radfar is a serial entrepreneur who previously sold his company AddThis to Oracle in 2016 and subsequently became an investor at Expa, a VC fund cofounded by Uber founder Garrett Camp.
Collective has just raised $8.65 million in funding led by General Catalyst and QED Investors, with participation from Google’s Gradient Ventures and Expa.
“I’ve been working across the space supporting small businesses for most of my career either as a founder or investor,” Radfar said.
“The one thing in common from these experiences is that running a business is really hard, businesses of one are booming and yet there are still so many pain points to address.”
Collective plans to help freelancers with some of the trickier parts of running a business, such as entity formation, taxes, accounting, business banking, and payroll. Collective will also have teams on hand to help with quarterly updates.
“Being an entrepreneur is lonely and hard and you’re only as good as the team behind you,” Radfar said. “You need the strength of community behind you so we provide that collective benefit and scale rather than just an individual. As an immigrant to the US I saw my parents come here and struggle to set up a business, it’s really hard, so on a personal level it’s very meaningful for me.”
The funding process was “incredibly fast and extremely competitive,” Radfar said.
Tech investors have piled into future of work startups, as the coronavirus upends the nine-to-five.
“This company got us excited because it’s doing the right thing,” Niko Bonatsos, managing director at General Catalyst told Business Insider. “This is a key area of focus for us and we know Hooman well. This deal is aligned with our values of responsible innovation and it’s helping to plug the gap of those left behind by Silicon Valley.”
Founded in 2019 by Radfar alongside Turkish cofounders Ugur Kaner and Bugra Akcay, Collective is launching from private beta to provide its back office platform across the US.