There are 60 million freelancers in the United States, and ever since COVID hit, the number of freelancers has been on the rise with the pandemic creating difficulties in the traditional job market. Lili is the all-in-one banking app that helps freelancers get a handle on their expenses and manage their money. By signing up for Lili checking account, users get access to mobile checking, direct deposit, and a Visa business debit card. Lili also offers tax planning tools that allow freelancers to sort and categorize expenses, automatically set aside a percentage of an incoming deposit for taxes, and users can easily generate yearly or quarterly expense reports. The company has quickly scaled since its launch and currently boasts 100,000+ users across all 50 states.
AlleyWatch caught up with CEO and Cofounder Lilac Bar David to learn more about the pain points of freelancing that Lili addresses, the company’s impressive growth during the pandemic, and recent funding, which brings the company’s total funding raised to $25 since its founding in 2018. This is the company’s second funding this year; Lili just raised its seed round in June.
Who were your investors and how much did you raise?
We just raised $15M in Series A funding, led by Group 11, with major participation from Foundation Capital, AltaIR Capital, Primary Venture Partners, Torch Capital, and Zeev Ventures.
Tell us about the product or service that Lili offers.
Lili is an all-in-one banking app designed for freelance workers. We combine banking services with real-time expense tracking, tax tools, and financial insights, created to help freelancers stay in control of their money.
What inspired the start of Lili?
We want to empower the 60 million freelancers in the US, so they can save time and money for the things that matter to them. My cofounder, Liran, previously worked as a freelancer for many years and experienced a lot of the pain points of independent workers firsthand. Freelancers have to singlehandedly balance various aspects of managing their businesses, from invoices to bookkeeping, expenses, taxes, and more. Liran and I were inspired to create a solution together, with the vision of building an app that caters to solopreneurs’ unique needs and simplifies all of these responsibilities. Our nearly 100,000 customers can save up to 60 hours and $1,700 per year with Lili.
How is Lili different?
Our app features are tailored specifically to meet independent workers’ needs as they’re managing their money. We recently added additional features, including enhanced expense management, which allows customers to sort expenses into even more categories with a quick swipe, plus add a note and a photo of a receipt; automatically generated quarterly income and expense reports; digital debit cards that customers can use before the physical card arrives in the mail; and Google Pay functionality.
What market does Lili target and how big is it?
We serve freelance, self-employed and independent workers, spanning across many industries from e-commerce shop owners to designers, programmers, fitness instructors, construction workers, chefs, beauty professionals, and more. The freelance economy has been growing rapidly in recent years and that growth has been accelerated even more by the COVID pandemic. We’ve seen many skilled workers turn to freelancing during this time and data has shown that 12% of the entire American workforce started freelancing this year, specifically due to COVID. We also expect to see more workers turn from part-time to full-time freelancing as they realize the benefits of having multiple revenue streams. We have nearly 100,000 users across all 50 states.
What’s your business model?
We earn interchange revenue when customers choose to pay with their Lili debit cards. We don’t charge banking fees, because we believe that freelancers shouldn’t have to pay to access their own money, in contrast to how big banks operate.
How has COVID-19 impacted your business?
Our growth in recent months has been tremendous, partly due to an increased number of freelance workers and partly because everyone is looking for new ways to easily save money. The accelerated shift toward independent work has driven a 700% increase in transaction volume on Lili since the beginning of the pandemic, and average monthly spending per customer has more than doubled this year.
What was the funding process like?
The funding process this time around was fairly straightforward and much quicker than we originally anticipated. We’re grateful that our investors were impressed with our product-market fit, growth, and vision. They saw our rapid customer adoption as a testament to the sustainability of our business.
What are the biggest challenges that you faced while raising capital?
While it can be challenging to raise funding during a pandemic – for instance, we couldn’t meet in person and conducted the entire process on video calls with our families on their own calls in the background – we were very fortunate that our seed investors were willing to fund the majority of our new round. This made things much less challenging than they could have been.
What factors about your business led your investors to write the check?
There’s a huge market opportunity for us right now. Our investors have seen how valuable an all-in-one freelance banking service like Lili is in the current market, as evidenced by our growth since launch.
What are the milestones you plan to achieve in the next six months?
We plan to grow our customer base and our team, particularly our engineering team.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
I recommend trying to streamline and minimize expenses while focusing on your core product and generating as much value as possible for your users and customers.
Where do you see the company going now over the near term?
The pandemic-induced trend toward freelancers shows no signs of stopping, and we want to make sure every freelancer in America knows about Lili and how it can help them.
The pandemic-induced trend toward freelancers shows no signs of stopping, and we want to make sure every freelancer in America knows about Lili and how it can help them.
We are focused on improving the user experience and solving the pain points of independent workers even better.
What’s your outdoor dining restaurant in the city?
I love outdoor dining at The Smith’s Lincoln Center location. It’s one of the best casual restaurants that serves a wide variety of food in an enjoyable environment.
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