HoneyBook, the leading client experience and financial management platform for independent service-based businesses, today announced a $155 million Series D equity round led by Durable Capital Partners LP with participation from Tiger Global Management, Battery Ventures, Zeev Ventures, 01 Advisors as well as existing investors Norwest Venture Partners, OurCrowd, and Citi Ventures.
In the past year, the pandemic accelerated two existing macro trends: the growth of the independent workforce and the digitization of small businesses. The way consumers interact with small businesses has fundamentally changed, necessitating the increased adoption of digital tools to support their growth. This shift drove immense momentum for HoneyBook, and the company tripled annual recurring revenue (ARR) in just 12 months.
At the same time, people continued leaving the traditional workforce to pursue their passion. In 2020, sweeping corporate layoffs driven by the pandemic resulted in an even greater surge in entrepreneurship, as more new business applications were filed in the U.S. than at any other time since 2005.1 New HoneyBook subscribers more than doubled in the past year, and members booked more than $1 billion in business on the platform in the past nine months alone.
“We believe the accelerated trends of self-employed business growth and small business digitization will continue as the economic recovery builds. With its visionary leadership and proven ability to innovate and provide unique solutions for the service-based small business sector, we believe HoneyBook will drive employment, scale its business and define its industry in the years ahead,” said Henry Ellenbogen, Managing Partner and Chief Investment Officer of Durable Capital Partners LP.
HoneyBook also continued to expand its market as those businesses whose work was unimpeded by COVID-19 restrictions—such as web and graphic designers, business coaches, and consultants—experienced a surge in demand for their services. New HoneyBook subscribers in these industries grew more than four times in the past year.
“Clients now expect streamlined communication, seamless payments, and the same level of exceptional service online that they were used to receiving from business owners in person. We’re proud to have helped independent service-based businesses meet the demands of a rapidly changing, digital-first world,” says HoneyBook CEO Oz Alon. “Amid a year of uncertainty, small business owners exemplified innovation and an unrelenting passion for their craft.”
HoneyBook will use the funding to advance product development and expand internal resources, which includes dramatically increasing hiring, so the company can continue meeting the needs of this diverse and growing workforce. Independent service-based businesses currently command over $1 trillion of the national economy,2 and HoneyBook is committed to powering their continued rise with the tools, resources, and community support they need to be successful.
About Durable Capital Partners LP
Durable Capital Partners LP (“Durable”) is an investment adviser focused on long-duration investments across private and public equity markets. Through deep fundamental analysis and broad pattern recognition, gained from substantial experience investing in both early-stage and compounding growth companies, Durable partners with founders and executives to build category leaders. Henry Ellenbogen, who served 18 years at T. Rowe Price, most recently as Portfolio Manager of the New Horizons Fund, founded Durable in 2019.
1 U.S. Census Bureau, Business Formation Statistics, 2020
2 2020 U.S. Census data and MBO Partners 2020 State of Independence Report