Bellevue-based financial management platform Formations has raised an $8 million Series A round.
Formations said the round, announced Wednesday, will go toward product development. The company's financial tools are aimed at self-employed workers like Realtors, consultants and health care providers.
"Solopreneurs have been left to figure things out on their own for too long despite their growing into the largest workforce in America, while the corporations have attracted all the technology and financial attention," Shahar Plinner, CEO and co-founder of Formations, said in a news release. "We are very excited to be moving onto the next milestone with our new funding and offer the burgeoning number of self-employed the right financial tools they require to build their own business from the start."
Formations has about 50 total employees and 10 open roles listed on its website, including positions in customer success, marketing and product management.
Formations, founded in 2019, aims to handle back-office bookkeeping for self-employed workers, with the goal of saving them money on taxes. The company helps clients turn their businesses into S corporations — entities that can pass income, losses, deductions and credits to shareholders, of which there must not be more than 100, to avoid any corporate federal tax. Formations also offers retirement and benefit plans.
Arthur Ventures led the funding round. The venture capital firm, headquartered in Minneapolis, has a portfolio that includes Seattle-based companies Avalara, a tax software company now publicly traded on the New York Stock Exchange, and TinyPulse, an employee feedback software company that was acquired by Bellevue-based Limeade last year.
"Taxes are the largest unmanaged business expense and one of the biggest surprises for taxpayers, especially for the self-employed," Ryan Kruizenga, general partner at Arthur Ventures, said in a news release. "Formations is an impressive startup with an innovative approach to taxes and accounting. We look forward to accompanying them on this journey."
