The Backstory
FreshBooks was founded in 2003 by Mike McDerment in Toronto, Canada, and the origin story is one of the most relatable in SaaS. McDerment was running a small design agency and was using a Word document as his invoice template. One day, he accidentally saved over an existing invoice with a new one, losing all the data. Frustrated, he spent the next two weeks building a simple web-based invoicing tool in his parents' basement. That tool became FreshBooks. For the first 3.5 years, McDerment ran the company out of his parents' house with a small team, bootstrapping growth and obsessing over the invoicing experience. FreshBooks grew slowly but steadily through word-of-mouth, eventually raising its first venture round in 2014, over a decade after founding. In 2017, JPMorgan invested $75 million, and in 2021, private equity firm Thomas Bravo invested at a valuation that reportedly exceeded $1 billion, making FreshBooks a unicorn.
Under the Hood
Mike McDerment spent 3.5 years running FreshBooks from his parents' basement in Toronto before getting a real office. During that time, the team would eat lunch at the dining room table and hold meetings in the living room while McDerment's parents were still living in the house. What's even more remarkable is that FreshBooks rebuilt its entire platform from scratch in 2017, a project internally called "BillSpring" that took years to complete. They migrated every customer to the new codebase without most users even noticing. This is extremely rare in SaaS; most companies that attempt full rewrites either fail or lose significant customer trust in the process. Also, FreshBooks has processed over $60 billion in invoices since launch, and the company has consistently maintained one of the highest Net Promoter Scores in the accounting software industry, regularly above 50, which is unusually high for any B2B product.