Published on the 18/10/2013 | Written by Newsdesk
The New Zealand based cloud accounting company is set to take off in the US market after a capital raising exercise that yielded $180 million…
The cloud-based accounting software firm has long been the darling of its home country, featuring as a regular winner on the awards circuit, including its founder and CEO’s win last night as Ernst & Young Entrepreneur of the Year for 2013, not to mention proving a massive hit with users, clocking up more than 211,000 customers worldwide.
Earlier this week it proved its power once again, raising $180 million of new capital from a range of US and New Zealand investors (including existing shareholders Matrix Capital Management and Valar Ventures backed by Facebook billionaire Peter Thiel) to fuel its push into the US market. As a result, its share prices soared in value by about 30 percent, helping it to become a $3 billion company on Thursday, with the New Zealand Herald reporting that it is “now worth more than casino and hotel operator Sky City and lines firm Vector”.
Xero says it has been seeing acceleration in the acceptance and adoption of its products, so the board decided to raise additional capital to continue building its team in the US market and support its continued global growth. America is certainly the next big nut to crack, with most of the 29 million small businesses not yet in the cloud.
US investors account for NZ$147 million of the capital raised. In addition to Matrix and Valar, Xero says the US investors represent some of the most enduring and well-capitalised asset management firms in the world, “all of whom will assist the company with its strategy and execution in the US market”.
David E. Goel, managing member of shareholder Matrix Capital Management, says “Xero is emerging as the definitive software platform for small business worldwide.
Capturing the power and affordability of cloud-based computing, Xero has democratised accounting, payroll, and other business software that was once the privilege of only the largest companies. Having empowered hundreds of thousands of small and medium-sized businesses in New Zealand, Australia, and the United Kingdom, Xero is poised to do the same for its 29 million potential customers in the United States. We are adding to our investment to help facilitate and accelerate this goal.”
Xero CEO Rod Drury says, “Xero has had seven years to build the best global accounting platform. That investment puts us in a strong position as the cloud market accelerates. The calibre of our investors and our strong cash position sends a clear signal of our aspirations to serve millions of small businesses around the world and attract the world’s best talent.”
