SMB SaaS: The Funding Roundup
November 21, 2019 | Contributed by: Mike Boland
Things continue to heat up in SMB Saas. For those unfamiliar, this sector is represented by companies that build software tools for small businesses. It’s everything from “front of the house” marketing and customer acquisition tools, to “back of the house,” operational management (think: payroll).
This is a wide range of companies and opportunities as we examine in an upcoming white paper. And while following the sector on an ongoing basis, we’re struck by the level of venture funding it’s receiving. So as this week’s Funding Watch post, we’re rounding recent SMB-Saas funding inflows.
Here’s the non-exhaustive list as a representative sample (listed in order of funding amount):
CloudKitchens: $400 million
Travis Kalanik’s flexible-kitchen company has received $400 million investment at a $5 billion post-money valuation. The funding comes from Saudia Arabia’s sovereign wealth fund (a source Kalanik knows well). Cloud kitchens are suddenly all the rage in streamlining food delivery and boosting margins, as we wrote in our recent series on the new phenomenon.
Freshworks: $150 million
Freshworks has announced a $150 million Series H round (totaling $400 million to date) which gives it a $3.5 billion post-money valuation. Funding comes from Sequoia Capital, CapitalG (formerly Google Capital) and Accel. The company provides a suite of business operational software including CRM and help-desk management. And it looks like it’s already spending some of that money on a pretty aggressive attack against Salesforce during this week’s DreamForce convention.
BlueVine: $102.5 million
SMB Fintech player BlueVine has raised a $102.5 million Series F round, bringing its funding to date to $250 million. The company focuses on financing and other banking services to the large but fragmented SMB landscape. The round was led by ION Crossover Partners, and also included Lightspeed Venture Partners, Menlo Ventures, 83North, SVB Capital, Citi Ventures, and Microsoft’s venture fund M12 among others.
Punchh: $40 million
Retail shopping analytics company Punchh has raised $40 million led by Adams Street Partners, Sapphire Ventures and AllianceBernstein. This brings its funding to date to $340 million according to PitchBook. Starting as a loyalty card tech provider, it has expanded into a sort of retail-as-a-service play for SMBs to have Amazon-like analytics and shopper personalization.
Eden: $25 million
Workplace management platform Eden has closed a $25 million Series B round led by Reshape. Participants. The company connects office managers with service providers in a sort of marketplace model. Other investors in the crowded round include Fifth Wall Ventures, Mitsui Fudosan, RXR Realty, Thor Equities, Bessemer Venture Partners, Alate Partners, Quiet Capital, S28 Capital, Canvas Ventures, Comcast Ventures, Upshift Partners, Impala Ventures, ENIAC Ventures, and Crystal Towers.
Flowhub: $23 million
Cannabis retail management software vendor Flowhub has raised $23 million from e.ventures, Kraft Heinz-backed Evolv Ventures and Poseidon. The company provides a purpose-built retail management platform for the specificities of selling Cannabis (regulations, compliance, inventory management, etc.). It taps into the emerging Cannabis market, which is projected to produce $66 billion in revenues over the next five years according to Grand View Research.
Teampay: $12 million
Employee spending management platform Teampay has raised a $12 million Series A round from Tribe Capital, Crosscut, Silicon Valley Bank, and Charles Hudson of Precursor Ventures. This follows its $4 million seed round in 2018. The company manages the process of outfitting employees with proper supplies and tools, including cash flow management and policy compliance.
Loop Returns: $10 million
eCommerce returns specialized Loop Returns has raised a $10 million Series A funding round from FirstMark Capital, Lerer Hippeau and Ridge Ventures. Sort of a “returns-as-as-service” provider, Loop Returns helps SMBs manage returns from online purchases. It sits on top of Shopify and has a similar eCommerce democratization play.
UploadCare: $1.7 million
CDN platform Uploadcare has raised a $1.7 million seed round from Runa Capital, Vendep Capital,Vaizra Capital and LVL1 Group. What’s CDN? The company makes it easier and cheaper for SMBs to standardize lots of files in their content management systems (think images, videos, marketing materials). The company claims to have 1000 paying customers, most of them SMBs.
We’ll be back in the coming weeks to drill down on some of the above companies. Meanwhile, we’ll be watching their progress and impact on the expanding SMB SaaS universe.