Meet the Toronto Scale-up Opening Borders and Opportunities For Small Businesses

By Andrew Maker

“Supporting innovators and hard-working entrepreneurs who are the backbone of our society, is what we are all about – from the start to today.” This is how FreshBooks co-founder, Mike McDerment, describes what Fresh Books is all about.

FreshBooks helps entrepreneurs of all stages succeed with an owner-first accounting platform that helps them manage their finances, billing, payments, and client engagement. It started out in McDerment’s basement in Ontario back in 2003 when he struggled to find a simple and professional way to bill his clients and has grown into a global company with more than 500 employees and offices in Canada, Croatia, Mexico, Netherlands, and US.

Today FreshBooks is a leading Canadian cloud accounting software company that has helped over 30 million users in over 160 countries. Created out of a necessity and a desire to do things better for small business owners, FreshBooks has stayed true to its roots. It still operates with entrepreneurial values and has become more than just a leading provider of digital accounting tools – it has become a champion for small business owners around the world.

The company continues to evolve and pivot, building on its strengths. It credits some of its growth and success to support it has received from the Canadian government.

Toronto’s lively start-up ecosystem, R&D friendly initiatives from the Canadian government, as well as attracting the attention of US-based investors was a recipe for success for the company to grow and continue to support their worldwide customer base. In fact, CBRE just ranked Toronto the #4 top city in North America for tech talent.

FreshBooks’ growth outside of Canada came because its platform received a lot of organic interest from the U.S. market, due to its easy-to-use, digital-first format. Interestingly, customers were not only happy with the features of the software but also with the ability to process payments in different currencies. This was a huge and unanticipated benefit for customers that has enabled Fresh Books to grow its base in the U.S., which accounts for about 60-70% of its total revenue.

As the company saw many of its customers enter crisis mode with the onset of the COVID-19 pandemic, it stepped up to become a helpful partner. Having digital tools like FreshBooks was essential for remote work during lockdown. But, FreshBooks’ employees were anxious to help customers beyond their books, so that became an even bigger part of the company’s mission. The FreshBooks COVID-19 Business Resource Hub was set up to assist customers with various topics such as small-business loans and other government policy updates, helping to make managing business during uncertain times a little easier by providing community insights from entrepreneurs.

“We saw a slowdown of economic activity as everybody pulled back, and now it’s the opposite. Everything is accelerating with a higher number of invoices and higher values per invoice. There are a lot of people wanting to start their own thing or become freelancers, so we have a lot of new businesses as well,” FreshBooks CEO Don Epperson recently told the Financial Post.

A trend that came out of the last year was that geographic borders will continue to matter less and less for small business owners. That is why FreshBooks aims to take the cross-border friction out of doing business. Receiving payments and supporting invoice and tax compliance systems across-borders solves a big roadblock for many small businesses and allows them to expand into new markets easily.

To continue to identify needs and trends like this, the FreshBooks team has been working with the Consulate General of Canada in Boston to build relationships with entrepreneurs and policy makers in the New England area.

FreshBooks announced last month its most recent round of funding, bringing the company to unicorn status. The company aims to use the financing to grow its teams and add new products and apps. Their continued international expansion will bring its important tools to even more small business owners and hard-working entrepreneurs.