Front Desk raises $4M to help out small businesses

Front Desk is a software-as-a-service (SaaS) company that provides a mobile-first solution for the service business industry. And it has now raised $4 million in Series A funding, it was announced on Thursday.

The round was led by FLOODGATE with participation from existing investors, including Second Avenue Partners; Version One Ventures; Rich Barton, founder of Expedia and co-founder of Zillow; and, others. 

Front Desk offers management platform for small to mid-sized businesses and franchises in the personal services arena. The company helps small businesses with tasks such as scheduling, client management, CRM, digitizing documents, payments and other things that would normally have to be handled by a staff of people, and puts them on a single, easy to use, platform.

The company started two and a half years ago by a group who were all owners or operations of personal services businesses, Jon Zimmerman, Front Desk co-founder and CEO, told me in an interview.

"Growing them while managing clients, trying to grow the customer base was very hard," he said, so the platform was started to help them with own problems and address the needs of businesses that want to grow relationships with their customers.

Front Desk launched a paid version of its app in March 2013 and, less than a year later, it already has over 1,000 businesses using the software. The software is used in verticals that include yoga studios, CrossFit gyms, tour operators, music schools, tutoring centers, and more.

By using the software, clients typically see a 2% to 10% raise in revenue, Zimmerman said,, and because the clients that use Front Desk are those that typically have recurring revenue, they are seeing that much on a monthly basis.

For example, one Front Desk client is outdoor rock climbing service Alpine Endeavors. 

The company has 25 employees, no formal office, and thousands of mountain climbing customers to oversee. By using Front Desk, customers are able to manage their activities and forms online, refunds can be processed easily, and employees are paid quicker. 

The new money will be used for hiring, building out the platform and expansion, Zimmerman told me.

At this time last year, Front Desk had eight employees; that number is now 24 and it expected to go up to 40 by the end of the year. Specifically the company is looking to build up its marketing team.

The investment in platform and product "runs across a myriad of improving technology,” Zimmerman said.

"We do a nice job with billing services and handling payments, but we can always do better," he told me. "We are looking family memberships, for example. We also found that we had a lot of international growth and we now have paying customers in 20 countries."

The app is now in seven languages, including German, Spanish, Swedish, and Portuguese, and it has clients in Europe, Australia, New Zealand, Dubai, Canada, and Mexico.

Ultimately, what Front Desk aims to do is to consolidate all the tasks that businesses have to perform one a single platform.

"80% of out businesses are what we call “paper and pencil,” meaning they are physically operating business that way, through checks and cash, and credit card terminals," said Zimmerman. "They are schedule using Google Calendar and using Excel to manage their clients, Intuit for payments."

That is why so many businesses are moving to Front Desk, because it integrates all needs into one package.

"What we saw that was the personal service economy is the fastest growing part of the economy," Zimmerman told me. "We want to help make starting a business more successful by minimizing friction and overhead so that they can capture more revenue."

In addition to the funding news, Mike Maples of FLOODGATE, and Boris Wertz of Version One Ventures have joined the Board of Directors at Front Desk.

"There are over 3 Million under-served personal services businesses representing over $350B of revenue in the US alone. FLOODGATE was compelled by FrontDesk's rapid adoption in this market with a mobile-first approach that could turn it into one of the most important new business software companies in the era of mobile meets cloud," Maples told me.

"FLOODGATE enjoys working with great teams chasing extraordinary markets. Our hope is to provide whatever help and perspective we can to accelerate FrontDesk's business and to always encourage the team to have the highest possible ambitions for massive growth and market dominance."

Seattle-based Front Desk, which was founded in November 2011,  previously raised $3.2 million in seed financing from Second Avenue Partners with participation from Venture One Ventures, Rich Barton, Lloyd Frink, and J.D. Delafield in September. This latest round brings the total capital raised to date to $7.2 million.  

(Image source: https://frontdeskhq.com)