ImpactAlpha, March 17 – Most crowdfunding platforms focus on startups raising equity. Pittsburgh-based Honeycomb helps local restaurants, food trucks and yoga shops raise debt funding from their communities. (What would one expect from a founder who is a sixth-generation community banker?)
The funds will support Honeycomb’s nationwide expansion as “regulation crowdfunding” gains steam.
The seed round was led by American Family Insurance Institute for Corporate and Social Impact, along with Innovation Works, K50 Ventures, Reinforced Ventures, Flight.vc and Pittsburgh’s Urban Redevelopment Authority.
Honeycomb and other crowdfunding sites provided a lifeline for Main Street businesses trying to stay afloat amid the Covid pandemic. More than 57% of the businesses raising money in Honeycomb have been women- or minority-owned, and 55% have been in low-to-moderate income communities. They are often seeking loans that are too small for banks and traditional capital providers. The site’s average loan size: $40,000.
American Family Insurance Institute saw an opportunity to help close equity gaps. “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,” said the firm’s Rob Kornblum.