BHub announced Tuesday that it took in a new round of capital just three months after receiving $4.4 million in pre-seed investment to offer full back-office SaaS for small and medium businesses in Latin America.
Monashees and Valor Capital Group are doubling down on their investment in the company by leading an inside round of $20 million in Series A funds that included QED Investors, Picus Capital and Clocktower Technology Ventures.
Founded in June, the Brazil-based company provides what it calls “back-office-as-a-service,” which includes bookkeeping, CFO services, legal and HR services so entrepreneurs can focus on their core business, Jorge Vargas Neto, founder and CEO of BHub, told TechCrunch.
BHub is Neto’s third company and his third in the financial sector. He was previously CEO of Zen Finance, which was sold to Rappi in 2020, and Biva, which sold to PagSeguro in 2017, he said. While integrating with Rappi, Zen Finance was told by its accounting firm that it had to pay capital gains taxation, which ended up requiring the company to redo all of its bookkeeping in 10 days.
“It was hellish, but I’m grateful for that experience because I became passionate about how I could help people avoid the same hurdles in Brazil and Latin America,” Neto added. “We tested the market by inviting entrepreneurs to talk about their hurdles of administering business. Some 500 people RSVP’d, and we ended up doing 300 interviews that enabled us to see the pain points and to come up with our vision for a solution.”
For a monthly subscription starting at $349, company owners can integrate BHub with their financial systems and view everything through one financial dashboard that includes a chat function for requesting reports, solving queries and any other activities.
Neto explained that in Brazil, hundreds of thousands of businesses closed in 2020, driven partly by the global pandemic and partly by little financial literacy. Brazilian legislation requires every business owner to have a third-party accountant. The market is reserved for them, and they are protected by the law, “so they don’t have to be that good,” he added. Where the typical accounting firm doesn’t use much technology, this is BHub’s “magic spot,” to provide a service based on a technology approach and with startups in mind, he said.
The Series A came fast for the company due to a combination of factors: achieving early product market fit, steady growth over a period of three months and high referral rates by customers.
The company counts 134 companies as customers and looks to hire 100 people across engineering, technical, accounting, legal, human resources, marketing and customer service.
“Considering the growth we’ve had and what we project we will do, we need to enhance the team of 51 people and grow to 2,000, 2,500 customers by next year,” Neto added. “We do think if we keep up the pace we will get there.”