The Trailblazers: Introducing Lili

Center-stage startups may soon become gamechangers, but their journey already contains a valuable lesson for us all

Innovation Spotlight

Lili is an all-in-one banking platform designed to save small business owners time and money by combining a checking account with innovative accounting software and a tax optimizer. Startup founders CEO, Lilac Bar David, and CTO, Liran Zelkha, explain:

“As serial entrepreneurs with 20 years of fintech experience, we were striving to create a holistic solution for small businesses.”

Lili was founded in 2019 and is based in NYC. With $80M investments, it is backed by Group 11, Foundation Capital, AltaIR Capital, Primary Venture Partners, Torch Capital, Target Global and Zeev Ventures. It was named one of the 50 Most Innovative Companies in the World by Fast Company in 2022, and takes pride in its efficient solution for all finance needs of small businesses.

Where did the idea come from?

“Consumers are interested in maximizing their financial solutions. Small business owners, while they are still consumers, are more concerned with their business. Consumers go to a 9-5 job. SMB owners have to be the employer as well. SMBs needs are more complex because it’s about the taxes, payroll, and managing the business as a whole. After years in finance, we were able to recognize the pain points and challenges of small business owners and realized that there wasn’t a single platform catering to all their needs.

It starts with balancing a single checking account for work and personal affairs. Small business owners need to keep personal and professional expenses separate; this usually forces them to open two bank accounts, and that becomes expensive, confusing and stressful to manage. The same goes with managing taxes. Business owners don’t take into consideration the portion of their income to save so they can cover their self-employment and income taxes since it’s not deducted like in a corporate job. Small business owners spend hours, if not days, sorting out their expenses, and over 70% businesses end up overpaying on their taxes due to a lack of information, lost receipts or just regular forgetfulness. The platform also assists in creating savings plans. The uncertainty and volatility of income when building a new business makes it difficult to set up a plan to save for an emergency or a well-deserved vacation.”

What were the first steps you took to realize your idea?

“We met & interviewed US based small business owners to identify the pain points of our potential customers. We prioritized a list of potential partners to work with, and gathered up a few key talents to join the ride. We started with two, and now we have 65 employees.”

What would you say is your wow factor?

“An all in one platform that combines banking, accounting and taxes. It saves time and money and creates an unparalleled, seamless experience for small business owners. But perhaps what differentiates the company most is a key element in the platform which is our investment in education. The education system doesn’t prepare students to run their own businesses, and the cost of education is exorbitant. At Lili, we invest in education. We’ve created guides and videos to ensure that our users are on top of it. These lessons aren’t just a one-time thing. There are a lot of materials SMBs need on a daily basis and they change as your business becomes more mature.”

How are you changing your customers’ bottom line?

“We are saving our customers time and money. They can handle their business more effectively. We provide simple solutions to cumbersome tasks; we make complex and time consuming processes easy and fast and the platform provides the professionalism and experience most SMB’s lack.”

What was the turning point?

“The US economy has changed dramatically ever since the pandemic started with five million new businesses that open every year. The need grew at that point and so did the search for a proper solution. “The shift to digital and remote working has been accelerated by the pandemic, which has changed the way businesses operate and manage their workforce and helped us to grow and develop at a rapid pace.”

What mistakes would you say you’ve made along the way?

“In our early days as a company, we focused on the freelance segment and built a product that combines personal finances and business finances into one experience, i.e., one bank account. As we expanded our offering to small business owners we’ve learned that this segment of the market, based on accountants’ recommendations, prefers to open two different bank accounts and separate their business and personal finances.”

What was your best decision along the way?

“Investing in the development of products based on our technology was our best decision. This decision was based on thorough market research and a clear understanding of our target audience’s needs and pain points. Additionally, this decision has also allowed us to attract and retain top talent, as it demonstrates our commitment to innovation and staying at the forefront of our industry.”

What did you not know about the market or about operating a startup that you can now teach others?

“Startups might face the challenge of finding the right market fit and scaling up. This can be overcome by continuously testing, learning, and iterating their product or service and by building a loyal customer base. It’s important to make the required pivots at the right time and not fall in love with what you have already achieved.”

Marketing strategy: how did you pave the path to your clients?

25% of our time and budget are allocated to marketing. Small businesses are a vital artery in the US’s ever evolving economy, yet are underserved and underrepresented in traditional financial platforms. In order to reach our customers we created a unique content strategy that focuses not only on serving their immediate needs but also arms them with tools that will benefit them in the future and allow them to make educated financial decisions. Our marketing strategy is to focus on them first. Lili Academy provides comprehensive lessons that unfortunately no other academic body offers.

Where will you be in a year from now?

“Continuing to lead the revolution of small business banking with innovative new products and features for our customers.”

What will the industry look like 5/10 years from now?

“It is difficult to predict with certainty what the fintech industry will look like 5 or 10 years from now, as it is subject to change based on various factors such as technological advancements, regulatory changes, and consumer behavior. However, some potential trends that may shape the fintech industry in the next 5-10 years include increased use of artificial intelligence and machine learning. Fintech companies may leverage AI and machine learning to improve customer experience, fraud detection, and risk management and we might see more widespread use of open banking that allows customers to share their financial data with third-party providers, enabling the development of new financial services and products.”