Suddenly everyone wants to build tools for freelancers. The world of work is changing, and more and more people are going freelance, by choice or by necessity. According to a survey by freelancing arena Upwork last year, more than one third of Americans worked as freelancers during 2020, and they contributed $1.2 trillion to the US economy.
Fiverr (Nasdaq: FVRR) got in early, offering a platform linking independent contractors to customers, but younger Israeli startups are also building tools meant to help freelancers succeed. HoneyBook, for example, has developed an application for providers of services to link up with customers and receive payments online. Lily, a company founded by former employees of Bank Leumi's Pepper online bank, operates a digital bank for freelancers and small businesses in the US. Deel enables companies to pay freelancers all over the world.
Tailor Brands can be added to this list. The company announced today that it had raised $50 million. It was founded in 2015 by Yali Saar, Tom Lahat, and Nadav Shatz, and is based in New York and Tel Aviv. It enables freelancers and small businesses to brand themselves by designing a logo, setting up a customized website, buying a domain and proprietary e-mail address, and creating business cards and merchandise.
"During the coronavirus pandemic, the small business market has grown rapidly, and millions of people have started working as freelancers. Some of them have salaried employment but do something independent in addition to that, which could be consultancy or selling cupcakes. They do it in order to attain economic security at a time of crisis, or else they're looking for meaning. Serving these small businesses is the new bonanza," says Saar, who serves as Tailor Brands' CEO.
Tailor Brands started out by developing an automatic generator of business logos, and that is still its leading service. Today, however, Tailor Brands offers a series of additional services surrounding the logo, such as building a website and buying a domain, as part of a $4-20 per month package. The company basically wants to become the first stop for a freelancer starting to build a business digitally, in contrast with the option of starting with a service such as Wix.com Ltd. (Nasdaq: WIX), which also has a logo generator.
"Historically, there were two points of entry for small businesses," says Saar. "One was the legal registration of the business, and the other was the purchase of a domain. We offer a third point, which is logo design. We have more users monthly than do large public companies, and they come to us before they have a website or a domain. Many of them have not yet completely decided what their business does, but we take them by the hand one step at a time."
According to SimilarWeb, the Tailor Brands website had 2.2 million visits in June, 2.5% more than in the previous month. The average time a visitor spent on the site was six minutes, and 16% of the users came from the US, 9% from Brazil, and 6% from Mexico.
There are many logo generators on the web. What's different about you?
Saar: "In most cases, these sites offer just one service, of building a logo. In our case, the logo is just the beginning, and we give you a full package. Most of the automatic logo generators that you'll find on the web are stupid, so if you're a mechanic, you'll get a logo with a picture of a spanner. With us, it's something on another level. There are brands that started with us and that are now café chains, for example."
And why not simply hire a designer?
Saar: "We're here to help those who don't want to spend a lot of money on day one. We don't compete with designers, and it could be that our customers will hire professionals later on to round things off. Automatic website construction got going in 2006, and then too people asked who would use it. Today, most people can manage with something automated. This has changed the work of designers, who no longer need to deal with simple landing pages."
First investment by GoDaddy in Israel
Tailor Brands employs 90 people in Tel Aviv and New York, and, including the current round, has raised $70 million since it was founded.
The current round was led by a strategic investor, US website registration and hosting giant GoDaddy (NYSE: GDDY), which has a market cap of $14.3 billion. This is GoDaddy's first investment in Israel. Other investors in the Series C round are OurCrowd and existing investors Pitango Growth, Mangrove Capital Partners (which also invested in Wix), Armat Group, Disruptive VC, and serial entrepreneur Richard Rosenblatt.
Published by Globes, Israel business news - en.globes.co.il - on July 22, 2021
© Copyright of Globes Publisher Itonut (1983) Ltd. 2021