Honeycomb Credit Closes $1.75M Seed Round to Expand Community Capital Model Nationwide
PITTSBURGH, March 16, 2021 /PRNewswire/ -- Honeycomb Credit, a first-of-its-kind loan crowdfunding platform, is expanding its community-based small business financing model nationwide after closing a $1.75 million seed funding round.
The Pittsburgh-based company has connected entrepreneurs with more than $3.5 million in expansion loans crowdfunded from thousands of locally-minded investors. Operating under Regulation Crowdfunding, this model of community-sourced loans is a new alternative to small business financing and has taken off during the COVID-19 pandemic.
"While local businesses were working on the fly to adapt their business models to the pandemic, the funding they needed simply wasn't available through traditional lending sources as banks and online lenders pulled back," said CEO George Cook, a sixth-generation community banker who cofounded Honeycomb. "We give these businesses a way to connect with community members who care deeply about the success of local businesses and want to ensure it through their investments."
Honeycomb's latest funding round was anchored by the American Family Insurance Institute for Corporate and Social Impact, a venture capital firm under the umbrella of the Madison, Wisconsin-based American Family Insurance group.
"At the Institute, we look to support the very best entrepreneurs across the country who are building scalable, sustainable businesses in a long-term effort to close equity gaps in America," said Rob Kornblum, Fund Portfolio Manager at the American Family Insurance Institute. "Honeycomb is creating real change in these communities by providing growth capital to under-banked small business owners, especially underserved entrepreneurs who have historically experienced barriers accessing traditional capital."
Expanding Nationwide
Since its founding in 2017, Honeycomb has run more than 100 investment crowdfunding campaigns in 18 states. Additionally, more than 57% of the businesses in Honeycomb's campaigns are owned by women or minorities and 55% have been in low-to-moderate income communities.
"The COVID-19 pandemic has shone a spotlight on the challenges faced by Main Street America," said Ken Martin, co-founder of Honeycomb Credit. "This funding round will allow the team to accelerate efforts to partner with investment funds and financial institutions to deploy community-minded capital nationwide."
In addition to the American Family Insurance Institute, other companies supporting this seed funding round include Innovation Works, K50 Ventures (Formerly Kairos), The Urban Redevelopment Authority of Pittsburgh, Reinforced Ventures, and Flight.vc.
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SOURCE Honeycomb Credit
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