HoneyBook, a startup that helps freelancers and independent business owners manage their customers, closed on a $250 million Series E funding led by Tiger Global Management with participation from Durable Capital Partners, Norwest Venture Partners, Citi Ventures and OurCrowd.
Its first institutional investor, UpWest, invested $25,000 in the company in 2013, which brought HoneyBook to Silicon Valley. In total the company has raised $498 million, according to Crunchbase data.
HoneyBook manages client interactions from the point when a customer lands on a website through an agreement, invoicing and payment.
“We manage your client flow and cash flow,” HoneyBook co-founder and CEO Oz Alon said in an interview.
HoneyBook’s customer base varies widely, but what they have in common is that they’re all generally service-based businesses, he said. “You can think of them as web designers, interior designers, business coaches, photographers,” he said. “The kind of service they sell is very personalized.”
Businesses want to automate client interaction, but also maintain a personal touch. And customer expectations have also changed; instead of getting a response in 24 hours, they expect a response within the hour.
HoneyBook says its service has grown more than 100 percent over the past year, with $1.9 billion in customer transactions. It now has tens of thousands of customers that it charges a monthly subscription fee of $39 plus a 3 percent transaction fee. The service uses Stripe to process payments.
This latest funding round came fast on the heels of HoneyBook’s $155 million Series D led by Durable Capital Partners, in May, a deal that valued the company at more than $1 billion.
Tiger Global was also an investor in the Series D, and partnered with HoneyBook before leading the Series E. “We built this trust with Tiger,” said Alon, adding “they truly think long term.”
“They’re supporting us with many different needs, from hiring talent to thinking strategically about the business and connecting us to folks that can do that for us,” he said.
With the capital raised this year, HoneyBook will invest in “defining this category and evangelizing it,” said Alon. On the product side, the company will build a platform with “more access to capital for our members: How can we help them bank, how can we help them in that balance between automation and keeping it personal?”