Automated accounting fintech Lettuce Financial snagged $15 million in fresh funding to fuel innovation and product development after closing a Series A funding round led by Zeev Ventures.
The funding round, announced Wednesday, follows a $6 million seed round in March and the release of LettuceHead AI, its free solopreneur-focused tax and accounting chatbot, in June.
“Businesses run by solopreneurs represent more than $200 billion in unmanaged, unpredicted, and unoptimized taxes, and although they are key contributors to the economy, solopreneurs have little guidance on how to approach and manage their businesses accounting and taxes,” said Ran Harpaz, founder and CEO the San Francisco-based fintech in a prepared statement.
With Lettuce, Harpaz contends he’s “democratizing the world of taxes and accounting” for solopreneurs – also known as sole-proprietors, self-employed or businesses of one. The firm aims to help them navigate the tax system and implement accounting strategies tailormade for their businesses with, for example, automatic quarterly calculations and deduction suggestions.
Solopreneurs make up a large portion of the workforce, according to the Intuit QuickBooks Small Business Index Annual Report published last October.
The number of businesses with no employees increased from 76% of U.S. businesses in 1997 to 84% in 2020, QuickBooks found, and more than half (56%) of those surveyed said they launched their businesses post-2020.
The number of people opting for full-time solo work rose 91% between 2020 and 2023, according to professional firm MBO Partners; The number of solopreneurs making more than $100,000 annually has increased by 53% since 2020 as well, MBO found.
Building Lettuce wasn’t just trend driven.
“We are a team of solopreneurs ourselves,” Harpaz told Banking Dive. “We have been owning businesses-of-one and working with a network of solopreneurs for a long while … [o]ur mission is to enable every independent professional to capture their full potential earnings, allowing financial freedom through technology.”
With the fresh funding, Harpaz told Banking Dive that the firm is looking to invest heavily in additional AI capabilities and expand product functionality in areas like retirement, healthcare and wealth management. Additionally, Lettuce seeks to find more distribution partners, and planning to invest in relationships with communities, influencers, and platforms where solopreneurs access work and support.
Oren Zeev, founding partner of Zeev Ventures, said in a prepared statement that the fintech addresses major problems and hurdles for the business-of-one community.
“[Lettuce’s] proven track record and positive response from this segment show a deep understanding of both the opportunities and challenges that solopreneurs face,” he said. “I believe in their vision and am confident that this investment will drive their next phase of growth, enabling Lettuce to better serve solopreneurs and strengthen their market position.”
Zeev also led Lettuce’s seed funding round in March.
“We see a momentous opportunity here,” Harpaz said, noting the market opportunity is more than $10 billion.
“We have significant product momentum in capturing this market,” he said. “We have significant differentiation in place, riding an AI/technology enablement wave; and we plan to accelerate over the next 24 months, capturing this opportunity to the max.”