Seneca is a Node.js toolkit for building microservices. It allows developers to start with a monolithic codebase and then break it into smaller, independent services (microservices) that communicate via messages as needs for scale increase. Seneca provides plugins that handle common functions like data storage, user management, caching, and logging so developers can focus on their core business logic. The benefits of the microservices approach include scalability, simplicity, and independence of implementation languages.