Wave gave away accounting software and charged for payments and payroll

Wave, a Toronto company, gave small businesses free cloud accounting and invoicing software and gathered users fast and at low cost. Its first revenue plan was advertising. Around 2014 to 2015 it began charging for built-in services such as bank transfers, loans and payroll. At the time of its sale to H&R Block, it had more than 400,000 customers, tens of thousands paying, and revenue above $50 million a year.

By Race to Scale Desk, edited by Lila Odinaev. Published 24 Oct 2026. How we work

What they ran

Wave gave small businesses its cloud accounting and invoicing software for free, which brought in users quickly and cheaply, according to The Globe and Mail's acquisition report. The first plan was to earn money from ads on the platform. Around 2014 to 2015, Wave started charging fees for financial services inside the product, such as bank transfers, online loans and payroll.

What happened

When H&R Block bought Wave for US$405 million, it had more than 400,000 customers worldwide, and tens of thousands of them paid. Its free-to-paid conversion was reported as about two to three times the 2 to 4 percent common at freemium companies. Annual revenue was above $50 million. Wave's about page says it has helped more than 5.9 million small business owners in the US and Canada since 2010.

What the account does not show

The conversion rate is only described as believed, not confirmed with company data. The customer and revenue figures come secondhand from a newspaper, not from filed accounts. The source gives no baseline from before the paid services launched, and it does not split revenue by service. It also does not say how the advertising plan performed. The 5.9 million figure is self-reported and does not say how many of those owners paid.

Questions

How did Wave make money if its accounting software was free?

Wave charged fees for financial services built into the product, such as bank transfers, online loans and payroll, starting around 2014 to 2015. It had first planned to rely on advertising.

What conversion rate did Wave get from free to paid users?

Its conversion was reported as roughly two to three times the 2 to 4 percent typical of freemium companies, though the figure is described only as believed.

How big was Wave when H&R Block acquired it?

H&R Block paid US$405 million, at a time when Wave had more than 400,000 customers, revenue above $50 million a year and 260 employees.