Accounting software provider FreshBooks joins unicorn herd after $130m fresh funding

FreshBooks, a Toronto-based cloud accounting software company focused on SMBs, secured $80.75m in a Series E round of funding, as well as $50m in debt financing.

Existing backer Accomplice led the equity financing, which the company described as “an inside round” that propelled FreshBooks to unicorn status with a valuation of over $1bn.

JP Morgan, Gaingels, BMO Technology & Innovation Banking Group and Manulife also participated in the equity investment, along with platform partner and new backer Barclays. With the new capital injection, FreshBooks has now raised a total of more than $200m in funding over its lifetime.

The financing will support the Toronto-born company’s global ambitions. FreshBooks plans to use its new capital toward sales and marketing, research and development, additional strategic acquisitions, building localized products and adding more features to its platform. The company is also exploring other channels such as resell partners, like Barclays, to bolster its customer growth. The company will also use its new funding toward investing in markets that are becoming more regulated and helping owners manage their finances through simplistic workflows.

FreshBooks has built a cloud-based accounting software platform designed to make things like invoicing, expenses, payments, payroll and financial reporting easier for small business owners and self-employed people. The company, which says it has served more than 30 million people in over 160 countries, was bootstrapped for the first decade before it raised $30m from Oak Investment Partners, Accomplice and Georgian Partners.

Last year, the company entered the LatAm market after acquiring Mexico-based e-invoicing company Facturama in September 2020 in an effort to expand its audience in Spanish-speaking markets.

Commenting on the funding, FreshBooks CEO Don Epperson said, “The funding comes as an injection of confidence in our mission to digitally enable small businesses. We’re going to use this capital to reinforce our competitive differentiators. This includes investing in markets that are becoming more regulated, helping Owners manage their finances through simplistic workflows, and prevailing as leaders in best-in-class support.”

Accomplice founder and managing partner Jeff Fagnan is clearly bullish on FreshBooks’ potential. He said, “With more people choosing self-employment, the FreshBooks team fundamentally believes in the growth of small businesses, and the importance of helping these businesses scale. As insiders, we have better context for how the company is scaling and how the market is growing, and this is why FreshBooks is our largest investment to date.”

FreshBooks is the latest in a growing number of Toronto-based unicorns. Late last month, 1Password raised $100m in a Series B round of funding that doubled the company’s valuation to $2bn.

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