When Mozaic was selected as one of 12 companies for the Google for Startups Accelerator: Black Founders class of 2022, founder Marcus Cobb said he hoped it would open new doors for the company.
After the Chicago startup on Monday announced it had closed a $20 million Series A funding round from Boston-based growth-equity firm Volition Capital, Cobb is ready to call the program a success.
Cobb credits the startup accelerator most for helping Mozaic "get our fundraising story right."
Originally developed to serve music professionals, Mozaic is designed as a transparent and simple way for creative professionals — a market that is expected to reach an estimated $480 billion by 2027 — to get paid. It has grown to serve the entire peer-to-peer creator economy, providing a way for creative teams to automatically split income with all collaborators in local currency.
"As an entrepreneur, you hear that a lot but you don't really know what's going on in VCs' heads or how they are looking at your business," Cobb told Chicago Inno. "That accelerator told us and showed us what they were saying. They tore it down. It was a lot of hard truth. They said: 'I don't see these metrics, I don't see these KPIs.' And it was exactly what we needed."
Cobb worked backward from there to create the best pitch possible for Mozaic.
When the new funding was announced, Larry Cheng, Volition Capital managing partner, credited the platform for solving the biggest challenge creators face with shared revenue, adding that he thinks Mozaic is well-positioned as the go-to option for automating multiparty payments.
While Cobb said Volition is a firm Mozaic had communicated with in the past, he doesn't think the startup would have ever been able to close the round without Google.
"There were all these No's up until Volition," he said, "and by that point, we had our story very tight."
What's next for Mozaic
Mozaic hopes to expand further into the gig and freelance economy and plans to use the new funding for new-product development and to double its headcount — currently 24 — by the end of 2023.
The startup currently uses a hybrid-work model at the TechNexus co-working space downtown. Cobb said the plan is to expand its footprint in the near future.
"We're going to stay downtown but it's going to be a modest expansion. I think the days of 100,000 square feet of office space are gone," he said.
The investment brings Moziac's total raised to date to $27 million with additional investments from Rise of the Rest, Maverick Nashville and music industry executive Joe Galante.
While Cobb admits that the last year has been a challenging fundraising environment for all startups, Including Mozaic, which had multiple term sheets recalled or rescinded, he thinks it may not have been such a bad thing for founders.
"It makes you focus on the business," he said. "There's this tendency to say that venture capital is going to save you and it's kind of a Cinderella mindset. When we had to focus on the business and surviving with or without capital, then it's a lot easier to raise in the end."
