With just three months of operation, the Brazilian startup BHub announced a pre-seed round of BRL 23 million ($4.3 million) this Wednesday (22). The startup offers a “back-office as a service” subscription, which combines software and human assistance to manage clients’ accounting, financial, tax, HR, and legal departments.
The financing was led by two of Brazil‘s largest venture capital funds monashees and Valor Capital, with the participation of QED and ClocktowerVC. The international funds Addition, Picus, NorteVentures, and EquitasVC are also part of the round as well as other angel investors.
A nightmare experience: how closing a business inspired BHub’s creation
Right before closing down one of his companies, Jorge Vargas Neto, BHub’s CEO, realized that all its accounting records needed to be revised. “After two years of operation, we had to practically redo all the accounting books from scratch before paying investors and closing the business,” he told LABS. It was “a nightmare of experience” that inspired Vargas Neto to create BHub together with Fernando Ricco and Marcelio Leal.
Vargas Neto explains that the company offers a subscription model capable of solving all back-office business demands. The subscription plans start at BRL 1,299 per month and comprise social contracts to accounting packages, legal assistance, privacy policies, and HR management.
The company promises to deliver a series of essential information and data for the good management of any business: reports, goals monitoring, accounting, and billing documentation, among others, all available on BHub’s proprietary platform for smartphones and desktops.
Currently, the company assists 51 clients and intends to use the new capital injection to invest in process automation and new technologies. Its target audience includes early-stage startups and SMEs.
According to Vargas Neto, in addition to being inspired by personal problems and the success of the San Francisco startup, BHub’s team listened to more than 200 entrepreneurs to understand their struggles.
“We discovered two pains that affect all entrepreneurs. The first is that accountants have acted in the same way for two hundred years. He’s the guy who doesn’t answer email, doesn’t answer the phone, and is usually an intermediary of bad news. It is not a partnership relationship”, explains Neto. “Which leads to the second point, the lack of clarity for entrepreneurs of how their business is performing. On average, an accountant takes 45 to 60 days to submit an accounting report, which is already old and is usually not understood”.
The company’s dashboard shows the company’s leading financial indicators: cash position, monthly income, expenses, net results, and also a cash runaway indicator. The latter is a metric that indicates how long a company can keep up with its financial duties, provided they don’t raise any additional funds.
The formulation of the indicator was directly influenced by the pandemic, as many companies were not prepared to face the moment. The survey Pulso Empresa: Impacto da Covid-19 nas Empresas, carried out by Brazil’s Institute of Geography and Statistic (IBGE) and published in July 2020, indicates that 716,000 companies closed their doors due to the COVID-19 crisis.
BHub hopes to combine this kind of data, vital to the health of the business, with 24/7 service, with responses in as little as three minutes. To do that, the company will double down on RPA (robotic process automation), as well as double its headcount from 24 to over 50 professionals in the coming months.