If you’re the proprietor of one of the 33 million small businesses in the U.S., odds are you have two pressing needs: Working capital and data.
And those 33 million businesses are part of one of the economy’s fastest-growing sectors. According to the U.S. Census Bureau, the number of applications filed to start new businesses has surged. Applications doubled in 2020 compared to recent years, and 2021 and 2022 saw over 5 million applications filed. The trend accelerated in 2023, with a record-breaking 5.5 million new business applications filed.
Access to those two pressing needs for this community might seem overwhelming to manage for any company serving this sector. But it’s music to the ears of Hello Alice Co-Founder and President Elizabeth Gore.
The company is a good example of a multipronged approach to advocating for small businesses, particularly among underserved demographic groups. Hello Alice has become a lifeline for funding and market intelligence for 1.5 million small businesses advocating for equitable access to financial resources and leveraging artificial intelligence (AI) to provide personalized guidance. It has also just received substantial funding for its mission from a diverse group of investors, including QED Investors, Mastercard and Guy Fieri.
“People don’t understand that small business is very complex,” Gore told PYMNTS in a recent interview. “And the reason why is the diversity of a small business community.
“Look down your street. You’ll see a coffee shop, maybe a laundromat, a childcare center — and all are incredibly different in their financial needs and how they’re structured. So, you must have that foundation of data to give each of them very different direction. That’s what we’re really proud of. And it hasn’t been an overnight success. It has taken us 10 years to build this.”
Those 10 years hit a tipping point Thursday (April 4) when the company announced its Series C round, for which the exact amount was unspecified but brought its valuation to $130 million.
As Gore tells it, Hello Alice is committed to equitable access to capital through various sources and its enterprise software-as-a-service (SaaS) offering gives banks and business services engagement and data analytics tools for their small and mid-sized business (SMB) customers.
The latest funding round will contribute to the expansion of the Hello Alice AI-driven financial health services and Small Business Funding Center. The center will work in tandem with the company’s Equitable Access to Capital program to help fund business expansion, with an emphasis on underserved communities.
So far this year, the platform has broadened its suite of inclusive financial products and programs with the Hello Alice Small Business Mastercard, the AI-driven Business Health Score, the Equitable Access Program and the $70 Million Equitable Access Fund, and its Elevate the American Dream initiative. The first 14 grants under Elevate the American Dream have already been distributed this year to small businesses across the U.S., and Hello Alice will continue to award more grants over the next several weeks, putting their grant funding at over $40 million.
Read more: Hello Alice Launches Business Health Score Tool for Small Businesses
In addition to finding and data, Hello Alice is lowering the barriers to using AI for entrepreneurs. Gore — a self-professed “data nerd” — believes it is among the most important areas for SMBs to focus on.
“Every company should be looking at the evolution of AI right now,” she said. “It is helping us move faster with data sets to get capital to small businesses.
“For example, we have a proprietary business health score where we are measuring the financial fitness of small businesses. That’s been in market for a while, and now we want to do is take that score and use our machine learning platform to push the small business owners through different decision trees to strengthen the health of their business. So, it might be how to improve your cash flow, how to do a better job incentivizing employees, how to pay taxes or even how to diversify your capital flows.”
Gore’s vision for Hello Alice extends beyond financial metrics, aiming to inspire and support small business owners from diverse backgrounds.
For example, it is in the process of distributing its Invest in Progress Grants, which is a collaborative initiative by Sage and The BOSS Network. This partnership has seen Sage commit $1.5 million over three years to empower small businesses such as the alumni network for Historical Black Colleges and Universities, The HBCU Metaverse. Its recent American Dream Award recipients included Bee Wild Outside, which is manufacturing refillable sunscreen containers to cut down on plastic use.
This blend of traditional finance-focused investors and advocates for small business reflects Hello Alice’s unique position at the intersection of FinTech and entrepreneurial support. Gore points out that the company’s success hinges on this synergy, leveraging financial acumen and a passion for small business to drive innovation and inclusivity.
“By the time people read this we will have more than 1.5 million small businesses on the platform,” she said. “And maybe we’ll jump to 2 million, and that’s not because of us. It’s because we have more small businesses launching in America than at any time in our history.
“Everyone’s so negative and pessimistic right now, but small business owners are smarter, they’re using technology more, they’re spending more on software. And if they had to close during COVID, they have the scar tissue that makes them smarter.
“So, I think in a year we’re going to see a renaissance of small business and we’re going to be right there with them.”
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