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Freee - Accounting Freee-dom

Updated: Jan 2, 2021

Freee provides cloud-based accounting and HR software to small and medium-sized businesses and self-employed individuals.


Freee is still in its high growth phase as it expands its cloud-based SaaS products to end-users. The number of paying customers is currently 220,000, having grown at a five-year CAGR of +50%. Revenue has grown YoY and QoQ consecutively over the past 12 quarters, driven by higher ARPU, in conjunction with an expanding user base.

CUSTOMER VALUE. Freee’s Cloud-based Integrated Accounting Software brings Invoicing, Expense Reporting, Financial Statements, Budgeting, and Internal Controls into the hands of

the SME user, reducing costs, improving efficiency, and providing transparency on an easy-to-use platform. The other mainstay product, Integrated Payroll Software, allows time tracking, leaving/joining management, payroll tax filings, and several other HR related functions down to the level of the SME user, where HR spending is likely a high cost.

MARKET. Freee estimates its total addressable market between Accounting and HR is over ¥1trn. COVID-19 has structurally shifted the demand for remote work upwards, driving

businesses towards cloud-based solutions. ERP tailwinds yet to come to include: preferential treatment for e-tax, new invoicing system introduction in 2023, and finally, revisions to the Electronic Book Maintenance Act that will allow linking of credit cards, e-money, and cloud accounting software. These factors will likely combine to accelerate the adoption of Cloud ERP. MANAGEMENT. Co-Founder/CEO Daisuke Sasaki established Freee in 2012, together with Co-founder and CTO Ryu Yokoji. The seven-member board has two outside directors. CEO Sasaki owns 23.3% of the shares outstanding, while CTO Yokoji owns 4.7%, indicating a strong alignment of both leaders with the long-term success of the company. OUTLOOK. The structural trend favors Freee, as does the significant addressable market as SMEs seek timely and more efficient ERP solutions, which inevitably will lead them to the cloud.


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