Accounting software provider FreshBooks is all set to boost its global expansion following a successful funding round that has netted it US$130 million. The company provides cloud accounting software solutions that aid small businesses in invoicing, receiving payments, filing taxes, and managing payroll.
Its lead investors during this round include Boston-based Accomplice that is providing equity financing to the tune of US$80.75 and a further US$50 million in debt financing from BMO Bank of Montreal.
The company reports that this boost has raised its valuation to over US$1 billion. This milestone is referred to as unicorn status amongst tech start-ups. It places FreshBooks in the same category as other Canadian firms that have achieved unicorn status like Clio, Clearco, Hopper, Visier, and Wealthsimple.
FreshBooks registered growing demand for its software during the pandemic as businesses transitioned to digitizing their accounting systems. Those looking to turn freelance and launch their own businesses have also sought out the provider. The company initially suffered a slowdown in demand when the pandemic first started and businesses made cutbacks. Demand has however since accelerated, more so as pandemic restrictions began easing.
At a time when FreshBooks started getting calls from potential investors, they were approached by venture capital firm Accomplice that proposed an internal round. According to founding and managing partner of Accomplice, Jeff Fagnan, this is the company’s largest investment. It is seen as an opportunity given the growth of small businesses and people looking to work for themselves.
FreshBooks was thought up in 2003 by company chairman Mike McDerment to serve the needs of his small design firm at a time he was growing frustrated with the invoicing programs he was using. Over time he has nurtured it into a platform that has now served over 24 million clients and is supported by a staff of over 500 employees. The company caters to clients in more than 160 countries including Canada, the US, the UK, the Netherlands, Australia, Mexico, Singapore, and Ireland.
With the new funding, the company plans to inject additional capital into its research and development, and sales and marketing divisions. It is also looking to add to its strategic acquisitions. In 2020, it acquired Mexico’s e-invoicing firm, Facturama in a move designed to expand its growth in Spanish speaking markets.
FreshBooks CEO, Don Epperson has said the company would be targeting investment in countries that have strengthened regulations. The provider expects to benefit from businesses looking to adhere to local tax and invoice compliance systems and are hoping to manage their finances through simplistic workflows.
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