Collective – an all-in-one online back-office platform for solopreneurs – recently announced it has raised $50 million 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 and quickly onboard the nearly 100K businesses on its waitlist.
Collective offers 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 annually. And the need for Collective’s services has been multiplying as freelancing is booming: 39% of the US workforce now participates in freelance work, a proportion projected to increase to over 50% by 2027.
Collective has utilized technologies like Large Language Models (LLMs) to build AI copilots for its team of tax experts, accountants, bookkeepers, and relationship managers. And these copilots dramatically reduce the time needed to complete processes such as bank reconciliation (70%) and expense categorization (90%). With its new funding, Collective can develop additional AI tools, smoothly scale its operations, and grow twice as fast as originally projected.
Collective has expanded nationwide and increased revenue by nearly 10x since its Series A round in 2021. Since its launch in 2020, the company has raised $82 million.
KEY QUOTES:
“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 $1.4 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. The first billion-dollar Business-of-One may have already been born.”
— Hooman Radfar, CEO and co-founder of Collective
“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. Collective’s complex workflows and proprietary data uniquely position them to leverage AI to disrupt the tax and accounting market.”
— Darian Shirazi, General Partner at Gradient Ventures
