FreshBooks
Toronto-based cloud accounting software company for small businesses, founded in 2003 by Mike McDerment and self-funded for its first eleven years before raising venture capital and reaching a $1 billion-plus valuation in 2021.
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- Established
- 2003
- Location
- Toronto, Ontario
- Country
- Canada
- Founded
- 2003
- Founders
- Mike McDerment; Joe Sawada
- Headquarters
- Toronto, Ontario, Canada
- What it does
- Cloud-based accounting software (invoicing, expenses, payments, payroll, reporting) for small businesses and the self-employed
- First outside funding
- $30 million Series A, July 2014 (Oak Investment Partners)
- Valuation
- Over $1 billion (Series E, August 2021)
- CEO
- Don Epperson (since January 2021); founder Mike McDerment is executive chair
Overview
FreshBooks is a Toronto-based cloud accounting software company that serves small businesses and self-employed professionals with invoicing, expenses, payments, payroll and financial reporting (TechCrunch). Its defining structural fact is unusual in software: founded in 2003, it ran for eleven years without outside capital before raising its first institutional round in 2014 (Cantech Letter). In August 2021 an $80.75 million Series E plus $50 million in debt financing valued the company at more than $1 billion — Toronto’s addition to the unicorn roster (Bloomberg).
Eleven years of bootstrapping
FreshBooks was founded in 2003 by Mike McDerment and Joe Sawada, rising — in Cantech Letter’s contemporary account — “from humble origins in McDerment’s parents basement” to become a leader in cloud-based invoicing for small businesses (Cantech Letter). The origin story TechCrunch retells is the classic founder-pain-point arc: in 2003 McDerment was running a small design agency and found Word and Excel frustrating for billing clients, so he coded his own invoicing solution — the foundation of FreshBooks (TechCrunch). The company was self-funded until 2014 (TechCrunch).
McDerment’s resistance to venture money was public and pointed. Late in 2012 he told Bloomberg’s Ari Levy he wasn’t interested in any investor with a short-term window: “I don’t want to hear anything about you needing your funds back until year No. 9,” he said — “At which point I will call you and ask you if you still want it back in the next year” (Cantech Letter). When the company finally did raise in July 2014 — $30 million led by Oak Investment Partners with Atlas Venture and Georgian Partners — it employed 122 people serving customers in 120 countries (Cantech Letter). A $43 million Series B followed in 2017, led by Georgian Partners and backed by Accomplice and Oak Investment Partners, and JPMorgan Chase made a strategic investment of undisclosed size in August 2019 (Global Venturing).
The unicorn round and the CEO handoff
January 2021 brought a changing of the guard: founder Mike McDerment stepped down as CEO and became executive chair, with Don Epperson — who had joined FreshBooks as executive director in 2019 — taking over as chief executive (TechCrunch). Seven months later the company announced the round that made it a unicorn: $80.75 million in Series E equity led by existing backer Accomplice, which described it as an “inside round,” plus $50 million in debt financing, at a valuation of “over $1 billion” (TechCrunch; Bloomberg). J.P. Morgan, Gaingels, BMO Technology & Innovation Banking Group and Manulife participated in the equity investment, and Barclays — already a FreshBooks platform partner in the UK — joined as a new investor (TechCrunch). Total lifetime funding stood above $200 million (TechCrunch).
Epperson framed the raise around regulated markets and compliance-driven digitization: the company would invest in markets becoming more regulated and help owners manage finances through “simplistic workflows,” noting that the pandemic had accelerated the shift of small businesses to digital management (TechCrunch).
Serving the businesses the incumbents ignored
FreshBooks’ pitch has always been that small service-based businesses are poorly served by accounting software built for accountants or enterprises. At the 2014 Series A, McDerment argued that small business owners were “grossly under-served when it comes to accounting software,” forced to choose between complex tools and running their businesses on Word and Excel — and positioned FreshBooks as “the only company exclusively focused on the needs of service-based businesses — ironically, the largest segment of the small business market” (Cantech Letter). Oak Investment Partners’ Ann Lamont framed the bet as growing the cloud accounting market for the millions of owners “that want to run their businesses without having to learn accounting” (Cantech Letter). The product scope TechCrunch described in 2021 — invoicing, expenses, payments, payroll and financial reporting for small business owners, self-employed people and their clients — stayed close to that original thesis (TechCrunch).
The pandemic gave the company a data-driven public role. Analyzing its own proprietary data, FreshBooks found that women-owned businesses were taking three times longer to recover in the U.S. than businesses owned by men — a finding Epperson said laid the foundation for data-sharing partnerships with local governments to help policymakers shape small-business support (TechCrunch). Around the same period, the credit-control automation platform Chaser integrated with FreshBooks to carry out automated, personalized invoice payments through cloud-to-cloud integration, attacking the late-payment problem for small firms (PYMNTS).
Expansion by acquisition
The funding was earmarked in part for strategic acquisitions, and FreshBooks had already begun buying its way into new markets (TechCrunch). In September 2020 it acquired Facturama, a Mexico-based e-invoicing company, entering the Latin American market and expanding its audience in Spanish-speaking markets (TechCrunch). In October 2021 it announced the acquisition of FastBill, a German fintech with customers in 16 European countries whose software automates invoices, receipts and banking processes (PYMNTS). FastBill founder Rene Maudrich stayed on as CEO and additionally became managing director of FreshBooks Germany, with the FastBill team remaining at its Frankfurt headquarters — making the deal FreshBooks’ entry point into Germany and Central Europe (PYMNTS).
Headquartered in Toronto, the company by 2021 employed 500 people across Canada, Croatia, Mexico, the Netherlands and the United States, and said it had served more than 30 million people in over 160 countries (PYMNTS; TechCrunch).
What this profile does not claim
This profile does not assert a single undisputed founding year: TechCrunch, Cantech Letter and Global Venturing report 2003, while other outlets say 2004, and the profile follows the weight of the tier2 reporting (TechCrunch; Cantech Letter; Global Venturing). It does not claim the 2022 discontinuation of “FreshBooks Classic,” which could not be verified from any tier1 or tier2 source read in full. It omits post-2021 leadership changes, layoffs and office closures, which rest on tier3 reporting not used here. It states no current headcount, revenue or customer figures beyond those reported in the cited 2014 and 2021 sources.
Timeline
- 2003
- Mike McDerment, running a small design agency, finds Word and Excel frustrating for billing clients and codes his own invoicing tool — the foundation of FreshBooks. Co-founded with Joe Sawada, the company starts in McDerment's parents' basement in Toronto and is run without outside capital.
- 2014
- After eleven years of self-funding — during which McDerment publicly rebuffed venture investors — FreshBooks raises its first institutional round: $30 million led by Oak Investment Partners, with Atlas Venture and Georgian Partners participating.
- 2017
- FreshBooks collects $43 million in a Series B round led by Georgian Partners and backed by Accomplice and Oak Investment Partners.
- 2019
- JPMorgan Chase makes a strategic investment in FreshBooks of undisclosed size, deepening the company's ties to the banking sector.
- 2020
- FreshBooks acquires Facturama, a Mexico-based e-invoicing company, entering the Latin American market and expanding its audience in Spanish-speaking markets.
- 2021
- Founder Mike McDerment steps down as CEO in January and becomes executive chair; Don Epperson, who joined as executive director in 2019, takes over as CEO. In August, an $80.75 million Series E led by Accomplice plus $50 million in debt financing values the company at more than $1 billion, with J.P. Morgan, Gaingels, BMO, Manulife and Barclays participating. In October FreshBooks acquires the German fintech FastBill to enter Germany and Central Europe.
What we could not verify
These claims came up in research and could not be confirmed. They are recorded here rather than published as fact or quietly dropped. If you hold a source that settles one, please tell us.
- Independent sources disagree on the founding year — TechCrunch (2021), Cantech Letter (2014) and Global Venturing (2021) say 2003; CEOWORLD (2023) and Kalkine (2021) say 2004. The profile uses 2003, the weight of tier2 reporting.
- The 2022 discontinuation of "FreshBooks Classic" was reported only in low-tier mirrors of Wikipedia and could not be verified from a tier1/tier2 source read in full; it is omitted.
- Post-2021 developments (the November 2023 departure of CEO Don Epperson and President Mark Girvan, interim co-CEOs, layoffs, the Raleigh office closure) rest on CEOWORLD.biz (tier3) and are deliberately omitted.
- Current headcount, revenue and customer counts were not disclosed in sources read in full and are omitted.
Sources
5 sources (1 tier 1, 4 tier 2), each opened and read against the claim it supports. Every source is independent of the subject; no first-party material is cited. See the source policy.
No first-party material was used. All substantive claims rest on sources read in full: TechCrunch, PYMNTS and Global Venturing, Cantech Letter (Canadian technology press), and Bloomberg's funding brief. Company-issued press releases and their wire republications were used only as leads and were never cited. The founding-year discrepancy between independent sources (2003 vs 2004) is flagged in the profile rather than silently resolved.
- Supports: Independent confirmation of the Series E: $80.75 million equity plus $50 million debt financing; valuation above $1 billion; round led by Accomplice with JPMorgan, Gaingels, BMO and Manulife participating and Barclays (a FreshBooks platform partner in the UK) added as a new investor. Open original source
- Supports: Toronto base; $80.75 million Series E plus $50 million debt financing; Accomplice-led "inside round"; valuation over $1 billion; J.P. Morgan, Gaingels, BMO Technology & Innovation Banking Group, Manulife and Barclays participation; lifetime funding above $200 million; invoicing, expenses, payments, payroll and financial-reporting product scope; 30 million people served in 160+ countries (company's stated figure, attributed as such); bootstrapped for the first decade; 2003 founding by McDerment out of his design agency's billing frustrations; self-funded until the 2014 $30 million round from Oak Investment Partners, Accomplice and Georgian Partners; Don Epperson joining as executive director in 2019 and becoming CEO in 2021 with McDerment as executive chair; 500 employees across Canada, Croatia, Mexico, the Netherlands and the United States; September 2020 acquisition of Mexico-based Facturama. Open original source
- Supports: $30 million first institutional round led by Oak Investment Partners with Atlas Venture and Georgian Partners; founded in 2003 by Mike McDerment and Joe Sawada; origins in McDerment's parents' basement; McDerment's public resistance to venture funding (the 2012 "year No. 9" line told to Bloomberg's Ari Levy); 122 employees and customers in 120 countries as of 2014. Open original source
- Supports: FreshBooks headquartered in Toronto; October 2021 acquisition of the German fintech FastBill (customers in 16 European countries; invoices, receipts, banking automation); FastBill founder Rene Maudrich remaining CEO and becoming managing director of FreshBooks Germany; the FastBill team staying at its Frankfurt headquarters; the acquisition as FreshBooks' entry into Germany and Central Europe; Series E recap ($130 million, $1 billion valuation); the prior-year Facturama acquisition from Mexico. Open original source
- Supports: Canada base; ~$131 million in debt and equity financing; Accomplice-led Series E with JPMorgan Chase, BMO, Manulife, Barclays and Gaingels; valuation above $1 billion; founded in 2003; 2014 Series A ($30 million, Oak-led, Atlas Venture and Georgian); 2017 Series B ($43 million, Georgian-led, Accomplice and Oak); strategic investment of undisclosed size from JPMorgan Chase in August 2019. Open original source
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