Behind the Term Sheet: How ZenBusiness Became a $1.7B SMB Powerhouse

Alexandre Lazarow
Cathay Innovation
Published in
4 min readNov 9, 2021


Nearly one year ago today, we shared our investment in ZenBusiness, leading its $55M Series B. Today, we’re excited to announce its $200M Series C, led by Oak HC/FT and Softbank with participation from Greycroft and us at Cathay Innovation.

With this latest round, ZenBusiness has become the latest billion-dollar startup out of Texas valued at $1.7B. It’s also the largest SaaS financing out of Austin this year. But more importantly, the fresh capital will further catalyze growth for a company that is empowering entrepreneurs to create successful businesses.

On the heels of this exciting milestone, we’d like to take a moment to explain how this startup has become the SMB powerhouse it is today by making entrepreneurship more accessible for everyone.

SMBs are critical to the US economy — but starting and running an SMB is still surprisingly complex.

Entrepreneurship is the cornerstone of the US economy. There are over 30M small businesses in the country — accounting for nearly all businesses — and is growing with the rise of freelancers and the creator economy.

They are also leading the charge towards a stronger, more resilient and inclusive future. During the pandemic, while hundreds of thousands of SMBs were going bankrupt, hundreds of thousands of new businesses were being formed at the same time. Data from the Census shows that entrepreneurs applied for 4.3M new Employer Identification Numbers (how the IRS identifies a new business entity) in 2020, that’s 24% growth since 2019.

Yet, it is surprisingly challenging to start and run a small business. Would-be entrepreneurs must navigate a myriad of challenges and questions, ranging from figuring out where to incorporate, how to manage ongoing governance (e.g. registered agents, operating agreements, etc), how to start a business bank account or build corporate credit to demystifying how to launch a website and attract visitors and relevant customers.

There has been a Cambrian explosion of software looking to address the emerging needs of new and existing SMBs (just look at the map below which is only within fintech tools!). While these tools span the gamut, from expense management, financing, insurance and payments to a wider range of broader enablement software, this has made the SMB software market incredibly crowded and convoluted. In short, there hasn’t been a unified single source to support small businesses… until now.

Source: CBInsights

The Shopify effect — How ZenBusiness is uniting the fragmented SMB market.

ZenBusiness is building a single pane of glass for entrepreneurs to start, run, and grow successful micro businesses. What Shopify did for ecommerce businesses, ZenBusiness is looking to do for the rest of us. Think of them as the operating system for SMBs.

ZenBusiness: a single pane of glass for small businesses

Today, the company offers digital tools, fintech solutions, educational resources, and world-class customer support. Over time, they will continue building out the platform including the ZenBusiness app which provides users with step-by-step directions to master business ownership, from how to form your LLC and create a website, to customized recommendations on how to scale your business. The power of the platform will be seamless integration and ease of use.

Embedded financial services will be a core piece of the offering. As the company describes it:

“ZenBusiness customers will have an integrated platform to manage all finance-related organization needs. They will connect their bank account, automatically categorize expenses with AI, and send invoices — all at no cost. Furthermore, users will be able to collect payments via invoices or through e-commerce sites and file their taxes using either software or a CPA.”

And this is resonating with small businesses. Since the start of the pandemic, in March 2020, the company has grown 400% and today serves over 200,000 entrepreneurs in the US.

Supporting entrepreneurship — the dynamism of our economy.

Marc Cuban, who is joining ZenBusiness as an entrepreneur advocate, perhaps said it best:

“As a serial entrepreneur, I understand the challenges that come with launching and running your own business. But business owners don’t have to do it alone. They can have an expert every step of the way to guide them on their journey towards business success. ZenBusiness is that personal business coach, helping hundreds of thousands of entrepreneurs get their businesses off the ground.”

If the dynamism of our economy depends on entrepreneurship, then we are excited to support it alongside ZenBusiness.



Alexandre Lazarow
Cathay Innovation

Global #VentureCapital @Cathayinnov, previously @OmidyarNetwork; author of Out-Innovate (HBR Press); professor @MIIS; outdoor enthusiast; raised on the Cdn