Toronto-based accounting software company FreshBooks has casually unveiled its new permanent CEO alongside a new $125-million USD ($179-million CAD) debt financing round.
Shaheen Javadizadeh will be taking the reins from long-time interim leader Mara Reiff, who has overseen the company since former president Mark Girvan and former CEO Don Epperson departed in November 2023. Reiff, who initially joined the company as chief data officer, is now the company’s COO, according to FreshBooks’ website.
Debt round and new CEO comes after a long period of leadership turnover at FreshBooks.
FreshBooks did not make a formal announcement about Javadizadeh taking the job, but the company website now lists him as CEO. A FreshBooks spokesperson told BetaKit in an email statement that Javadizadeh joined the company in the fourth quarter of 2024 (his LinkedIn profile shows he has held the post since January).
His first public mention at the helm was accepting $125-millon USD in debt financing from Morgan Stanley’s expansion capital and private credit funds this week.
“FreshBooks looks forward to leveraging [Morgan Stanley’s] expertise in this next chapter of growth,” Javadizadh said in a statement.
Describing himself as a professional CEO, board member, and entrepreneur in his LinkedIn profile, Javadizadh has previously held executive leadership positions at Texas-based legal software company Wolters Kluwer, California-based library management software Innovate Interfaces, and California-based printing company 4over. He also currently serves as the chairman of the board at California-based TakeIn, a food e-commerce platform he co-founded.
FreshBooks declined to disclose to BetaKit any additional details on the debt, why FreshBooks raised it, or if the company considered or pursued equity financing.
This is not the first time FreshBooks has taken on sizable debt. One year after the company raised a $130-million USD (then $163-million CAD) investment round at a unicorn valuation in August 2021, FreshBooks secured a $100-million USD syndicated debt facility from BMO Financial Group and J.P. Morgan to aid global expansion plans it has since pulled back on.
RELATED: Inside FreshBooks’ struggle to reach profitability
Reiff’s tenure as interim leader overlapped a multi-year struggle for FreshBooks to find profitability. This past October, The Globe and Mail reported that in the first half of 2024, FreshBooks had little cash, high debt, and was looking for capital to remain operational. According to Morgan Stanley, FreshBooks is expected to use this new debt financing to refinance its existing debt and fuel its continued growth. FreshBooks told BetaKit that it will use the debt to continue on its current path of driving profitable growth as a company.
“We believe FreshBooks has a tremendous market opportunity ahead of it and are confident that our growth credit and capital solutions teams are uniquely positioned to support FreshBooks in this important stage of its growth,” Pete Chung and Ashwin Krishna, the heads of the Morgan Stanley funds, said in a joint statement.
The debt round and new CEO comes after a long period of leadership turnover starting in March 2023, when the now-departed CEO Epperson embarked the company on a journey to become profitable by 2025 through headcount and programmatic spending reductions.
When BetaKit asked about the state of that plan in October, following a number of executive departures, office closures, and rounds of job cuts, a FreshBooks spokesperson told BetaKit that its strategy “remains focused on growing FreshBooks’ profitably in the North American market.”
When asked where the company now stands on its path to profitability, FreshBooks declined to comment on its specific financials, but called the financing from Morgan Stanley a “vote of confidence.” A FreshBooks spokesperson added that the company has not made any significant changes to its team size since October, and that it continues to hire into critical positions across the organization.
Feature image courtesy FreshBooks.