As if Stacey Abrams isn’t doing enough as a political activist and author, she’s now part of a financial startup that has just received $9.5 million in Series A funding.
The Black woman who flipped Georgia, co-started Now in 2010 with Lara O’Connor Hodgson. The startup helps small businesses pay invoices faster. Small businesses will set up a Now account and when the business submits an invoice, Now will pay the invoice within two days, minus a 3% service fee.
This will help small business pay for expenses, equipment, and even employees faster without having to wait for the invoice to be paid by the company or individual it would normally be sent to. Abrams and O’Connor Hodgson came up with the idea when another business they started grew too fast and they didn’t have the necessary tools to manage it.
“We started looking for a loan. All we needed was the money to meet the order. This was during the credit crunch, and we could not get it,” Abrams told TechCrunch. “We went from bank to credit union to factoring, and every time we got near the end, the credit model changed and we got kicked out of the program. Finally, unfortunately, we had to let our business die. We grew to death. We got too big to meet the needs and didn’t have a solution.”
Now, announced Wednesday the funding was led by the Virgo Investment Group and featuring Cresset Capital Partners. The funding will go toward marketing and advertising to attract more small businesses to the platform.
The coronavirus pandemic crushed small businesses, especially minority and BIPOC-owned small businesses. Last year, a nationwide survey found 45% of small, Black businesses anticipated closing within three months. Additionally, the first round of the Paycheck Protection Program was pillaged by large companies and corporations.
O’Connor Hodgson told TechCrunch the average wait time for invoice payment expanded from around 50 days before the pandemic to between 70-80.