95% of freelancers don’t make six figures. At Wethos, we raised $8M to change that.
It’s 6pm on a Friday. You start to close your laptop when that all-too-familiar email rolls in: "This timeline is super tight, can you come in tomorrow?"
Faced with unpredictable layoffs, increasingly unrealistic demands, and the looming thought of companies forcing a return to the office, many have started to wonder, "Is this really worth it?"
In Q2 of this year, 11.5 million people answered this question by quitting their jobs. Next to retail, business services saw the biggest exodus of talent to freelancing, which is projected to be over half of the workforce by 2030. Today, leaving a corporate job means leaving your corporate paycheck and benefits, a risky move when only 5% of freelancers make over $100k a year. Freelance as a viable and lucrative career has been out of reach for most, but in the words of Vice President Harris: “I often say that the ability we should all have is to see what can be, unburdened by what has been.”
Today, we’re thrilled to announce Wethos’ new $8M round of funding led by Third Prime with participation from new investors Javelin, Full Circle, F7 Ventures, Clocktower, and Revolution’s Rise of the Rest Seed Fund, as well as continued support from Laconia, Valuestream, and many others. We’re also excited to add Wes Barton from Third Prime and Vivian Cheng from Javelin to our board alongside existing board member Dion Ridley, Engineering Leader at Netflix Studios. This fresh injection of capital follows 100x growth since we launched with just 100 studios less than a year ago. We proudly power nearly 10,000 virtual studios, which have won over $54M in projects by leveraging Wethos’ tools.
The idea of a Virtual Studio was born out of personal pain and experience. After leaving the big agency world behind to become freelance founders, we quickly realized the limitations of running a one-person shop and—like so many of our friends and peers—we started subcontracting with others to pitch bigger projects and take home bigger paychecks. At the time, existing software was focused primarily on freelancers as solopreneurs, which left us cobbling together expensive tools that significantly chipped away at our take-home pay and made six-figure freelancing seemingly out of reach. So we solved our own problem: first with software for our own business and—following the exceptional growth of the freelance market due to the pandemic—by releasing that software to create what is now known as Wethos Virtual Studios.
Wethos offers a free, end-to-end operating system with tools for everything from pricing projects to embedded business banking to financial software for getting paid and paying teammates. This system responds to what we believe are the three main ingredients to help more freelancers break through the six-figure ceiling:
1. Wage transparency
When freelancers don’t share their rates with one another, clients have more power to say “if you won’t do this for X dollars, we’ll find someone who will.” Freelance marketplaces have prioritized employers and promoted cheap labor for too long, driving wages down and creating a race to the bottom. We offer a unique library of scopes and services, which started with real scopes we sold to our own clients. Our library is now home to pricing recommendations powered by tens of thousands of data points, all from real studios.
2. New-age financial services
Service-based businesses are uniquely challenging because you're typically selling services that haven't happened yet, you have to scope based on how you think things are going to go. Then, you bill for the services after they've been delivered, you invoice based on how things actually went. As a result, you don't really know whether you're making or losing money until it’s too late. It shouldn’t take an accountant and three spreadsheets to figure out the sweet spot for your profitability, so we partnered up with Unit to change that. Our operating system is powered by a first-of-its-kind embedded banking and payments stack, which makes it easier than ever to set up a business bank account and track real-time cash flow and profitability.
3. Tools to team up
Freelancing almost always starts as a solo endeavor, but you quickly realize that you only have so many hours in the day. As one person, you are limited in both the number of projects you can take on and the types of projects you’re able to tackle. We see the ability to team up as an opportunity to help freelancers compete with large agencies for better projects and bigger paychecks. Our operating system is built for services businesses of all sizes and stages, we're here to help you from the day you get started to the day you're ready to scale up. With Wethos, you can easily assign services to teammates and send free and instant peer-to-peer payments without ever switching tabs.
Whether you’re an independent designer, a high-end consultant, or a freelance engineer, our tools can empower you to compete with large, legacy firms right from your couch. With this fresh round of funding, we have big plans to roll out innovative mobile experiences and additional financial services to our users, like invoice factoring and international payments. We’re also investing heavily in expanding our partner ecosystem to offer freelancers healthcare, tax support, savings accounts and more, all while deepening our library of peer-priced scopes and services across sectors.
This past year was incredibly transformative and undeniably challenging, both personally and professionally. With economic instability causing people to quit at all time highs and wages stagnating at all time lows, we’re rolling up our sleeves to pick up the pieces of a fragmented market and redistribute power to freelancers everywhere. We know our customers because we are our customers. That’s what makes our product unlike any other, and that’s why we’re going to end this race to the bottom, together.