ZenBusiness Raises $55M Series B to Support Micro Businesses

Launching a new, small-scale enterprise was once a straightforward process. Securing a physical location on a main thoroughfare, displaying a sign, and commencing operations were typically all that was required. However, the emergence of extensive government regulation and the internet have significantly altered this landscape. Today’s entrepreneurs must navigate the complexities of obtaining licenses – often multiple licenses across various states – and simultaneously establish a comprehensive online presence.

Numerous solutions exist to assist with company formation, others to manage regulatory compliance, and a wide range of no-code website builders aiming to help businesses carve out a distinct online identity. However, relatively few platforms offer a truly unified experience, integrating these essential services and centering them around the needs of the business owner.

ZenBusiness has been working to provide this comprehensive solution – and much more – in recent years. Founded by Ross Buhrdorf, previously the founder of HomeAway, the company was created to simplify the process of starting a business. I have previously reported on the company’s $4.5 million seed funding round in 2018 and its $15 million Series A round last year, and today the company is announcing a substantial Series B funding round.

The Austin-based public-benefit corporation has secured $55 million in funding, led by Alex Lazarow of Cathay Innovation. These funds will be allocated to continued growth and the expansion of the company’s service offerings. ZenBusiness currently employs over 150 people, all working remotely, and plans to add 100 or more employees in the coming year.

What is fueling this expansion? In part, the recent economic challenges brought on by COVID-19 have prompted many small businesses to rapidly develop online strategies and address potential licensing and regulatory requirements in multiple states due to remote work arrangements.

The company reports a 100% increase in revenue this year and now supports over 80,000 small businesses that have launched using its platform. ZenBusiness is currently utilizing its third generation of website builder tools and has also significantly enhanced its other features.

A key area of recent growth for ZenBusiness has been the addition of financial services, branded as ZenBusiness Money. The company acquired Joust Banking several months ago, a startup that had previously raised $4.6 million to provide financial services for freelancers. These services are now being integrated into ZenBusiness, and Joust co-founder Lamine Zarrad now serves as the company’s SVP of Product.

With this new funding, Buhrdorf stated that the company will continue to develop its banking services and provide more educational resources to assist entrepreneurs in learning how to manage and grow their businesses.

He emphasized the company’s commitment to exceptional customer service. “We answer phone calls almost immediately, typically within 60 seconds, and we consider this crucial. We also respond to emails very quickly, within 24 hours, and often within just a few hours, and we are consistently available via chat.”

As the competitive landscape in the areas ZenBusiness serves intensifies, Buhrdorf believes his company’s dedication to service quality and integrated solutions provide a distinct advantage. “I welcome the competition, as it indicates a thriving market. Our focus remains on delivering value to our customers and ensuring their success. By combining this with outstanding service, I am confident we will achieve a winning formula.”

In addition to Cathay, this funding round included participation from GreatPoint Ventures, Breyer Capital, and Omega Venture Partners. Existing investors such as Greycroft, Lerer Hippeau, Interlock Partners, mark vc, and Austin-based ATX Venture Partners also contributed.