Automated accounting fintech company Lettuce Financial has closed a Series A funding round led by Zeev Ventures, raising $15 million in new funding to fuel innovation and product development.
Funding round, Announced WednesdayThis follows a $6 million seed round in March and the release of LettuceHead AI, a free tax and accounting chatbot for solo entrepreneurs, in June.
“Sole proprietorships owe more than $200 billion in taxes that are unmanaged, unpredictable and unoptimized. Despite their significant contribution to the economy, self-employed businesses have little guidance on how to approach and manage their business accounting and taxes,” Ran Harpaz, founder and CEO of the San Francisco-based fintech company, said in a statement.
With Lettuce, Harpaz claims to be “democratizing the world of tax and accounting” for solopreneurs (also known as sole proprietors, self-employed people or one-person businesses). The company aims to help solopreneurs understand the tax system and implement accounting strategies tailored to their businesses, with automated quarterly calculations, suggested deductions and more.
Solopreneurs make up a large portion of the workforce. Intuit QuickBooks Small Business Index Annual Report It was published last October.
According to QuickBooks, the number of businesses with no employees has increased from 76% of U.S. businesses in 1997 to 84% in 2020, with more than half (56%) Survey participants He said the business will start in 2020 or later.
According to a specialist company, the number of people choosing full-time solo work is set to increase by 91% between 2020 and 2023. MBO PartnerThe number of self-employed individuals making more than $100,000 a year has also increased by 53% since 2020, according to the MBO.
Building Lettuce wasn’t just about trends.
“We are a team of solopreneurs ourselves,” Harpaz told Banking Dive. “We run our own businesses and have been working with networks of solopreneurs for a long time… [o]Our mission is to enable financial freedom through technology and empower all independent professionals to reach their full earning potential.”
Harpaz told Banking Dive that with the new funding, the company will invest heavily in adding AI capabilities and is looking to expand product features in areas like retirement, healthcare and wealth management. Additionally, Lettuce is looking to find more distribution partners. Communities, influencers and platforms where independent contractors can access work and support.
Oren Zeev, founding partner at Zeev Ventures, said in a prepared statement that the fintech addresses major problems and obstacles for the solopreneur community.
“[Lettuce’s] “Their track record and positive response in this segment demonstrates our deep understanding of both the opportunities and challenges facing solo entrepreneurs,” he said. “I believe in their vision and am confident that this investment will drive their next stage of growth, enabling Lettuce to better serve solo entrepreneurs and strengthen its position in the market.”
Zeev also led Lettuce’s seed round of funding in March.
“We see a significant opportunity here,” Harpaz said, noting the market opportunity is more than $10 billion.
“We have great product capabilities to capture this market,” he said. “We are riding the wave of AI/technology enablement and have a strong differentiation. We plan to accelerate over the next 24 months and make the most of this opportunity.”
