Digital-First Banking

Freelance-Worker Banking App Lili Sees 700 Pct Boost During Pandemic

Many businesses have benefited from the digital shift and lifestyle changes brought on by the coronavirus, but few have seen the kind of growth that the freelancer-banking app Lili has since the traditional economy went dark in March.

“We have seen a huge uptick in volumes ever since the COVID started — a 700 percent increase in volumes and account openings,” Lili Co-founder and CEO Lilac Bar David told PYMNTS in a recent interview. She said the company has almost reached 100,000 accounts, “which is a record number for us.”

Bar David co-founded Lili two years ago, but the app has been live for less than a year. It specializes in offering banking services, expense tracking, tax and financial services in one place for freelance workers of all kinds — from accountants to models.

The Three Secrets Of Lili’s Success 

The CEO attributes the company’s growth to three key reasons. “One is an uptick with the freelance economy in general within the U.S.,” Bar David said, noting that 12 percent of the U.S. workforce now does freelance work, a shift spurred by the pandemic.

She puts part of the increase on necessity, given today’s high U.S. unemployment and increased work-from-home duties. “I think people saw the opportunity to actually diversify their sources of money and income and making sure they are not dependent on just one income,” Bar David said, predicting the ongoing shift within the U.S. labor force will only become larger and more stable.

She said the second reason for Lili’s success is that COVID-19 caused so many bank branches to close, which got many freelancers rethinking whether they needed to go to banks in person.

“I think people [are] more willing to try different FinTech firm solutions like Lili,” Bar David said.  “The fact that everything is within the app is a value proposition that is very appealing right now. If you were starting to work 100 percent online, I think there is no reason for you to go back to a branch proposition.”

She said the final catalyst for Lili’s rise is the fact that people are more aware of spending and fees, and are trying to save money in the COVID-19 era.

“I think our solution is very appealing from that point of view,” she said. “We don't charge any account fees [and] there are no minimum balances. And you can actually save up to 60 hours and $1,700 a year just by using all our tools to manage, maximize your deductibles, save on taxes [and] save on fees.”

What Banking Services All Freelancers Need 

Even though the freelance workforce is so diverse, Bar David said freelancers all focus on the same thing — doing their jobs while managing a self-employment business and staying in control.

“It doesn't matter if you're a driver, delivery guy, an eCommerce shop owner, a programmer, a designer working from home or ordering something online,” she said. “You face the same challenges of managing your expenses, paying taxes, knowing where you stand and so on.”

And because freelancers tend to be very busy people, Bar David said Lili’s mission is to make a simple-but-sophisticated app that does the work for them, not the other way around.

“Freelancers are busy maintaining their business, growing their customer base and trying to struggle with working from home,” she said. “From our point of view, it's about how can we help them save money, save time and make sure that they're in control.”

$25 Million In New Funding 

With the freelance economy seemingly poised to keep on growing, Lili recently raised $25 million through two funding rounds.

The firm netted $10 million in a June seed round led by Group 11, with Foundation Capital, AltaIR Capital, Primary Venture Partners and Torch Capital also participating. Then in October, Lili raised another $15 million in a second round again led by Group 11 and including the same participants plus Zeev Ventures.

The Future 

With fresh capital in hand, Bar David said her plans for Lili are twofold.

First, she said the company is “all about making sure that we can reach more customers, more freelancers and have our services available.” But Bar David also plans to grow Lili’s engineering and ops teams “to make sure that we can develop more tools, more services.”

As CEO of a company that caters to freelancers, Bar David said she follows macroeconomic data very closely — especially unemployment data. She’s also tuned in to anything that has to do with resources available to freelancers — stimulus payments, PPP loans, etc. — and how prepared people are if things get rough or more COVID-19 lockdowns come.

At the same time, Bar David said she likes to identify what might be the next big thing in freelance work, such as unprecedented gains by delivery services over the past eight months, or in-store businesses moving to eCommerce.

“We are trying to track all of those different aspects and see how we can be helpful — how we can better serve that community,” she said.

Don’t Call Them ‘Gig Workers’

But one thing Bar David won’t do is call her customers “gig workers.” She avoids the terms “gig worker” and “gig economy” because she feels they devalue the sector’s contributions.

Bar David noted that as many as 60 million Americans are doing full- or part-time freelance work. “It's a huge chunk of the U.S. worker economy,” she said, adding that freelancers cut across different occupations and skill levels.

“I think ‘gig’ means that you're doing something very small and niche and not significant to your income,” she said. But in reality, being a freelancer merely means choosing your occupation, position, hours and flexibility.

“I think the ‘freelance economy’ is a better concept than the ‘gig economy,’” Bar David said.

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NEW PYMNTS STUDY: ACCELERATING THE REAL-TIME PAYMENTS DEMAND CURVE – NOVEMBER 2020

About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.

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