FreshBooks is set to enter its "next phase of growth" after securing US$30 million in its first round of funding from Oak Investment Partners, Atlas Venture, and Georgian Partners.
Mike McDerment, founder and CEO of the Cloud-based accounting software provider, said that the company’s first funding round would allow it to "do more faster".
"The business I co-founded 10 years ago in my parents' basement has secured its first round of institutional funding — US$30 million from some of the world's best investors. This capital will give us the ability to do more faster," he told users today in an open letter.
McDerment said that the new capital comes after 18 months of growth, new staff recruitment, and the establishment of a substantial executive team at its headquarters in Toronto.
"This team now leads over 150 FreshBookers, determined to build a global leader headquartered in our hometown, Toronto." He said. "Having these people on board has transformed FreshBooks, and on a personal note, changed my work-life balance, setting myself and our whole company up for our next phase of growth."
The online accounting provider, which is tailored to service small, client service business owners, has grown substantially since its founding a decade ago, now claiming to serve five million customers in at least 120 countries. FreshBooks' customers have collected over US$14 billion through its platform, according to the company.
For McDerment, the new cash injection will enable the company to accelerate its growth, and provide it with a greater opportunity to tap into a largely untapped global market.
"This capital will help propel us forward, faster. FreshBooks can accomplish more for you with this capital, and we will," said McDerment. "Realizing our vision and feeding our ambition requires capital. So, we've raised it.
"There are 60 million small businesses in the English speaking world and only about 17 percent of them use accounting software. The rest mostly use Word and Excel. Consider the implications," he said. "Going forward, FreshBooks' success should be measured by the increase in adoption of accounting software — growing adoption from 17 percent to 25 percent and then to 50 percent and beyond.
"Good news though; we are watching a whole new generation of entrepreneurs emerge. People who have grown up with the internet, the kind of people who will never use Word and Excel to run their businesses because they know someone's built something better and it's waiting for them in the cloud or their mobile app store," he said.
FreshBooks is not without its competitors, however, with New Zealand-based cloud accounting provider, Xero, yesterday indicating that it could be ready for ain the United States as early as next year. Although larger businesses are now starting to sign up to its services, Xero has made a name for itself in the small to medium enterprise market.
Additionally, Intuit’s QuickBooks Online is broadening its reach,with the likes of American Express and its app for Mac in June