FreshBooks, a cloud accounting software company based in Toronto, today announced that it has raised $80.75 Million in Series E funding. It also secured $50 million in debt financing.Accomplice, an existing backer, led the equity financing. FreshBooks described it as an inside round that propelled FreshBooks into unicorn status at a valuation exceeding $1 billion.J.P. Morgan and Gaingels, BMO Technology & Innovation Banking Group, Manulife, and platform partner Barclays also participated in the equity investments. FreshBooks now has more than $200m in capital over its life.FreshBooks is a cloud-based accounting platform that makes it easier for small businesses and self-employed people to invoicing, pay their bills, and report on financial matters. For the first ten years of its existence, the company was completely self-funded.FreshBooks, like many startups, was founded to solve a problem for its founders. Mike McDerment, co-founder of FreshBooks, was a small agency manager in 2003. He found Excel and Word difficult to use when billing clients and felt that they weren't designed to produce professional-looking invoices. He coded his own solution, which became the basis of FreshBooks. The company was entirely self-funded up until 2014 when McDerment raised $30 million from Accomplice, Oak Investment Partners and Georgian Partners.Don Epperson joined FreshBooks in 2019 as an executive director, before he was promoted to CEO. McDerment is still the executive chair of the company.FreshBooks employs 500 people in Canada, Mexico, Mexico, the Netherlands, and the United States, with over 100 employees hired in the last year. In an effort to reach Spanish-speaking customers, FreshBooks also entered the LatAm market in the past year by acquiring Mexico's e-invoicing company Facturama.FreshBooks will use the new capital for sales, marketing, research and developing and other strategic acquisitions.Epperson stated that the company will use the new funds to invest in markets that are becoming more tightly regulated, and help owners manage their finances using simple workflows.He said that more business owners are trying to be digitally empowered to comply with local tax and invoice systems.Owners now need to be able to manage their businesses digitally. This has changed the way small business owners interact with accountants and bookkeepers, Epperson explained to TechCrunch. This funding is a boost to our mission of digitally enabling small businesses.The exec kept a tight lipped on growth metrics such as year-over year revenue percentage growth. He stated that FreshBooks had seen significant growth in its number of customers since last year. This was partly due to a pandemic-driven rise in small businesses.Epperson stated that the pandemic revealed the need to better understand how seismic events impact customers.Epperson stated that it took three times longer for businesses owned and managed by women to recover in the United States than businesses owned by men. This statistic provided the basis for further research into the effects of the pandemic on businesses in multiple industries. We also entered into data-sharing partnerships to assist policymakers in enacting change in support for small business owners.Accomplice's founder and managing partner, Jeff Fagnan of Cambridge, Massachusetts, has expressed confidence in FreshBooks' potential. He said that his firm continued investments in Canada over the past seven year. With more people opting for self-employment, the FreshBooks Team believes in small business growth and the importance to help these businesses scale. We are able to see the bigger picture of how the company is scaling, as well as the growth in the market. This is why FreshBooks has been our biggest investment.FreshBooks is one of a growing number Toronto-based unicorns. 1Password raised $100m in Series B funding last month to double its valuation to $2Billion. 1Password became a unicorn for the first time in 2019.
