Published on the 11/09/2020 | Written by Jonathan Cotton
Are Xero users happy? (Because its shareholders sure are)…
As businesses everywhere come to terms with the new realities of commerce in the age of Covid, Xero is offering support for SMBs.
Dubbed The Check-In, the program is a series of steps for small business owners to connect with their employees, designed to support their wellbeing – just the ticket in a chaotic 2020.
Based on advice from New Zealand health and wellbeing experts, the program provides quick, easy and cheap techniques to help leaders get to know their team better, foster stronger connections and support others to look after themselves.
“All workplaces play a central role in building people’s resilience and positive wellbeing.”
“The impact of the Covid-19 pandemic on our small business industry is far-reaching – impacting wellbeing and inflating the stresses many of us feel day-to-day,” says Craig Hudson, managing director for New Zealand and Pacific Islands at Xero.
“All workplaces play a central role in building people’s resilience and positive wellbeing, helping them to be healthy, contributing members to their families and communities,” says Hudson.
The initiative follows research that shows that since the first Level 4 lockdown in March, almost 60 percent of small business employees have not talked about wellbeing in their workplace and more than a third (36 percent) of Kiwi small businesses’ employees haven’t been offered any wellbeing support.
Credit where it’s due: Xero does seem to take wellbeing seriously. The cloud accounting platform has partnered with the Mental Health Foundation to study wellbeing across the small business sector, plus they’ve launched the Xero Assistance Programme which provides free and confidential wellbeing support to approximately 850,000 Kiwi small business owners, their employees and families.
It might be a case of wanting to share the love. Xero’s value has been on a steadily upward trajectory, having risen almost 30 percent this year alone, and the group is currently celebrating its first financial year of real McCoy profit, finishing FY20 NZ$3.3m in the black, a vast improvement on FY19’s NZ$3.5m loss.
Driven by the great Covid-19 cloud migration – and an undeniably potential-filled fintech future – the first ever full-year net profit after tax is a milestone for the accounting software company.
“While Covid-19 has required us to rapidly implement immediate solutions to help our customers, our long-term strategy and ambitions are unchanged,” said the company in its latest annual financial report.”
“We remain committed to three strategic priorities: To drive cloud accounting around the world, grow the small business platform, and build for global scale and innovation.”
Add to that a little diversification, too. Signalling a move into the lending space, Xero has acquired Waddle, a Sydney-based cloud-based invoice lending platform.
“The acquisition of Waddle is an important step in our strategy to grow Xero’s small business platform and to help our customers better manage cash flow and gain access to working capital as needed,” says Xero.
“Waddle’s lending platform has the potential to enable a wide range of banks, fintechs and other lenders to better support small business financial needs. We’re excited about the benefits Waddle can bring to small business and our banking partners.”
Founded in Australia in 2014, Waddle offers lines of credit based on business’s invoices. Using the platform, banks, fintechs and other lending partners can provide invoice finance to SMBs that have elected to share their accounting data.
“Waddle’s lending platform has huge potential and we’re excited about our future together,” says Xero CEO Steve Vamos of the acquisition.
“Waddle will remain a standalone company, however together we will jointly explore ways to expand our small business customers’ access to forms of lending beyond invoice finance”.
“We will continue to support Xero’s open ecosystem, with over 200 financial services partnerships and API connections,” says Vamos. “Xero customers can select the apps and lending products that best meet their needs.”
So it’s good feelings all around, and that goes double for founder, Rod Drury. Two million shares – worth around NZ$200m and representing just over 11 percent of Xero’s issued capital – were recently sold on behalf of the Drury-linked Rodanna Ventures Trust (the trustees of which are Drury, ex-partner Anna Stuck and Scott Moran).
And as Drury cashes out, chairman David Thodey has decided to cash-in, recently buying shares worth A$405,000 to effectively double his stake in the cloud-based accounting platform.