FreshBooks: valuation, funding & revenue

Revenue

Funding history

Investors

Overview

FreshBooks makes cloud accounting and invoicing software for small businesses, freelancers and self-employed professionals. It's built for people who need to send invoices, track expenses and get paid, not for trained accountants. Mike McDerment started it in Toronto in 2003, reportedly after accidentally saving over an invoice in a word processor, which makes it one of the oldest cloud software companies in Canada.

Funding history

FreshBooks took relatively little outside money in its early years. Its best-known round came in August 2021: US$80.75 million in equity plus US$50 million in debt. Existing investor Accomplice led the equity, which the company described as an inside round. J.P. Morgan, Gaingels, BMO, Manulife and new backer Barclays also took part. The company said the round valued it at more than US$1 billion, making it a unicorn.

An inside round, led by existing investors rather than a new firm, is worth noting. It can mean insiders are highly confident, or that a new lead couldn't be found at the desired price, or simply that existing investors wanted more ownership. Context matters.

Layoffs and the move to profitability

Like many software companies that raised in 2021, FreshBooks had to change course when funding markets tightened. BetaKit reported several rounds of layoffs starting in 2022, including a cut of about 10% of a roughly 800-person team. The CEO explained the decision in plain terms: capital markets had become too unpredictable to keep relying on outside funding for growth. FreshBooks instead set a plan to reach profitability using its own cash flow and a debt facility. BetaKit also reported significant turnover in senior leadership during that period.

Revenue: what's public

FreshBooks hasn't published its revenue. It sells monthly and annual subscriptions in tiers based on features and number of clients, so revenue is recurring, but the size of the business isn't public. Third-party estimates vary, so we don't repeat them. See our guide on estimating private company revenue.

What FreshBooks' path shows

FreshBooks is a good example of a mature software company that raised at a peak valuation and then chose profitability over another round. That decision often makes sense when a new round would mean a lower valuation, and when the business is close enough to break-even to get there with cost cuts and existing credit. Our guides to bridge rounds and venture debt cover the alternatives.

What this means if you're…

Selling to FreshBooks: a company focused on profitability buys tools with fast, measurable payback, especially in customer support efficiency, payments and marketing performance.

Building for small businesses: FreshBooks' integration marketplace is one route to its large base of small business users.

Researching SMB software: compare its approach with larger accounting platforms that serve both small businesses and their accountants.

Sources

Every figure on this page comes from the public sources below. Where sources disagreed, we used the company's own announcement or a primary news report. Private-company data changes; check the date beside each figure.

1. FreshBooks press release
2. BetaKit
3. TechCrunch