The success of a recent event centered around Small Business Saturday has grown local crowdfunding platform provider Honeycomb Credit's total investments for emerging companies and organizations to over $21 million since the fintech startup's launch in 2018.
Honeycomb, based in East Liberty, allows small businesses to pursue alternative forms of investments from those offered by traditional banks by utilizing what essentially amounts to loans funded by anyone who wishes to front the initial capital.
The small business works with Honeycomb to decide the interest rate and investment repayment plan for a given campaign, which investors can see before submitting their funds. Honeycomb charges a percentage-based fee to investors of the campaign to help cover various operating costs of its own.
Since 2018, over $5 million in repayments have been returned to investors who backed a small business on Honeycomb's portal.
"Not only are we getting money flowing to small businesses, we're also proving that small businesses can pay back [investors] and people can earn a nice return while supporting local businesses," George Cook, co-founder and CEO of Honeycomb, said.
For the Smal Business Saturday event on Nov. 25, Honeycomb waived all of its traditional investor fees up to 4% or $200 for any investor who backed a business that had a campaign running on Honeycomb's platform. Over 60 companies had an active campaign during this period, a large fraction of the 300 businesses Honeycombe has attracted to its platform since its first launch with a Pittsburgh juice company over five years ago.
Honeycomb said over 530 investors submitted more than $650,000 in funds during the event as well. That's the largest amount of investors who participated and the most amount of dollars raised during this now-third annual event.
"[It was] really, across the board, a very diverse cross-section of small businesses from Pittsburgh that did really well," Cook said of the event, which he attributed to the company's headquarters being here as part of the reason to account for this heavier local saturation. "Really, across the country, we saw that a lot of food and particularly craft beverage offerings continue to do really, really well on the platform."
Cook declined to cite company revenue figures for the venture capital-backed startup. He said the company employs 16 people full-time.
