Kiwi fintech Hnry has raised $NZ2.15 million ($2 million) for its platform taking the admin burden out of tax and finance management for contractors, sole traders and gig-economy workers.
The funding comes from existing backers, including members of Ice Angles and AngelHQ, plus new investment from Aussie VC firm Equity Venture Partners.
Wellington-based Hnry was founded in 2017 by James Fuller, Claire Fuller and Richard Freestone, born out of the Creative HQ fintech accelerator.
The platform is designed to take care of financial admin tasks for freelancers, contractors and independent earners.
“If you’re trading independently as an individual, you get burdened with a huge amount of financial administration,” James Fuller tells StartupSmart.
Fuller’s own background is in tech and management consulting, and he and his co-founders have all worked as contractors.
Many contract or gig-economy workers find themselves tied up in the admin of invoice and credit control, managing expenses and making payments, or using several different services to manage them, he explains.
“We felt this pain firsthand, and we realised we were being treated like we were a small business, when actually, we were just sole traders,” he says.
Banks and the government will ask for profit-and-loss statements and balance sheets, treating independent earners as if they are businesses.
“People who are independent earners are barbers and midwives and graphic designers — they don’t have staff or creditors or inventory,” Fuller explains.
“That level of complexity was just absolutely overkill.”
Nothing new about the gig economy
According to Fuller, the rise of gig-economy workers has led to more people facing the same financial admin issues. However, he also notes the gig economy is nothing new.
When you think about the gig economy, you tend to think of Uber drivers or Airbnb hosts. But, between tradies, freelancers and contract workers, we have always had people working on short-term, flexible contracts, he says.
“We just didn’t have a word for it.”
For anyone taking on flexible work outside of permanent employment, or doing extra work on the side, “the world of financial admin can be quite daunting”, Fuller says.
“They just want this administrative nightmare to go away.”
And it seems there is a demand for the product. Hnry officially launched in April last year, with a handful of trial beta customers.
Now, it has “thousands of Kiwis” on its books, Fuller says, with between 40% and 50% of new customers coming from friends or family referrals.
The business has seen double-digit month-on-month revenue growth for the past 12 to 15 months, he adds.
Global growth trajectory
This funding is largely pegged for a “hiring splurge”. Hnry currently has eight full-time staff, plus a contingent of freelancers and contractors, but the team will be growing over the next few months.
The growth is intended to help manage “a huge amount of demand from customers”, Fuller explains.
Hnry strives not to be a “faceless accounting app”, he adds.
It’s a registered tax agent and aims to provide a good service, as well as a tech-savvy solution.
“We’ve joked that we’re Service-as-a-Software, as opposed to Software-as-a-Service,” he says.
“Being able to have a personal presence is really important to us.”
The founders will also invest in building out and developing the technology, to deliver new solutions to customers.
Finally, they’re looking at continuing to scale the business in New Zealand and overseas.
“It’s a really exciting growth trajectory,” Fuller says.
Globally, this is a $1.5 trillion market, he explains. Already, the team has started early trials in other markets outside of New Zealand.
“We know this is a global problem … how can we put this thing out there to the wider market and really start to solve problems in other regions as well as New Zealand?”
Start small and validate
According to Fuller, one of the keys to Hnry’s success so far is that he and his co-founders didn’t try to build out a full product before they had assessed that market’s needs and desires.
“The big thing to me was always starting small and validating early,” he says.
Instead, they focused on “going out and speaking to people and understanding their pain before we even built anything”, he explains.
“It was about understanding the customer problem and starting with that.”
Rather than starting with a solution you think will fix the problem, he advises other founders to start with the problem, and try to understand that in the context of everyone else’s challenges.
“It makes for a lot more of a sensible way to grow out a business,” he says.