HoneyBee, a startup that aims to help companies provide access to financial support for their employees, announced today it has raised $5.7 million in equity in a round led by FFVC.
Resolute Ventures, Afore Capital, Rebalance Capital, K50 and Financial Venture Studio also participated in the financing, along with two-time NBA all-star Baron Davis.
HoneyBee has also secured a $100 million debt facility from CIM, an institutional impact investment manager that provides debt capital for innovation that lends to underserved communities.
The Los Angeles-based Certified B Corp describes itself as a B2B financial technology company that is on a mission to give employees — and their families — free access to financial support in the workplace as a benefit. That support could come in the form of employer-sponsored “no-cost rainy day funds” and on-demand financial therapy with the goal of “creating a healthier workforce environment.”
Or put even more simply, HoneyBee aims to give HR and DEI leaders that say they are committed to creating an equitable and inclusive culture a way to provide access to financial tools and education to help improve their employees’ financial health.
CEO and co-founder Ennie Lim said she was inspired to start HoneyBee after suffering financial setbacks after her own divorce several years ago.
“My credit was negatively impacted to the point where I found myself unable to get access to any affordable credit,” she recalls. “I wish I had done a lot of things differently, but I didn’t know what I didn’t know, and I was embarrassed to ask for help.”
The experience helped Lim realize the importance of feeling in control of your financial life.
“It affects your self-esteem, happiness, and personal relationships and it made me want to help others take control of theirs,” she said.
Lim teamed up with Benny Yiu and Max Zschoch in 2017 to build HoneyBee with that goal in mind.
“We are solving a massive economic disparity and we’re leveling the playing field in the workplace by reducing the financial literacy gap and providing access to credit to people that need it most,” Lim said. “It’s important to acknowledge that people come from different socioeconomic backgrounds. The varying levels of financial illiteracy is an issue we can no longer ignore.”
A study conducted by Washington University in St Louis found that 89% of HoneyBee users are people of color, women, or both. During the pandemic, when the need for its offering was even greater, HoneyBee signed over 60 mid-markets companies as customers and is launching with Fortune 500 companies later this year.
The startup’s user growth grew by 225% during the pandemic and the company says it delivered over $2 million in rainy day funds. Meanwhile, its on-demand financial therapy usage increased by 172% over the prior year.
“Amidst this pandemic, when employers were cutting budgets, furloughing, laying off, reducing hours and salaries, we started to see a shift in their buying behavior to address financial health,” Lim said.
Honeybee’s customers include Alameda County Community Food Bank, DC Central Kitchen, Kate Somerville, Community Catalyst of California, Southwest Water Company, Straus Family Creamery, Asian Art Museum, Pasadena Humane Society and Peachtree Health.
NBA star Baron Davis grew up in South Central Los Angeles with his grandmother and says he believes strongly in the startup’s desire to provide access to affordable credit.
“Financial literacy is a barbed wire for people like me. It is essential for companies to provide equitable access to financial support for their employees,” he wrote via email. “Financial access alleviates stress in the workplace especially when they are working hard to make ends meet to support their family. Providing easy access to money and education will result in a happier, healthier, productive workforce.”
FFVC Partner AJ Plotkin said his firm likes that the structure of the product “solves a serious access problem for customers who need a bridge for short-term, emergency needs, in a way that is not burdensome for the employee or the employer.”
The company plans to use its new capital in part to grow its sales, engineering, and customer success team.