Maverick Kiwi entrepreneur Rod Drury’s latest venture has notched up another two successes, ahead of its listing on the New Zealand Stock Exchange (NZX) next week.
Xero Live won the International Technium Challenge in the UK last week, beating companies from China, France and South Africa, shortly after becoming Microsoft’s first New Zealand ISV partner to obtain gold certification as a hosted solution provider.
Both these achievements provide independent validation that the online business software provider is on the right track, says chief executive Drury.
“In this industry there isn’t a lot of an opportunity for independent validation of what you are doing,” he says.
Acquiring Microsoft Gold certification is almost a mandatory requirement for anyone working with the vendor’s technologies, Drury says. “It does show on an independent basis that there is quality and heritage around what you have been doing – it is mandatory validation for any Microsoft partner.”Xero uses Microsoft’s ASP.net web application framework on top of SQL Server in its product.
The certification also gives Xero the “keys” to the Microsoft “kingdom”, says Drury. “It is tickets to the game – it gives us access to joint marketing spend and gets us on the speaking circuit at Microsoft events.”
Xero will embark on marketing activities with the vendor later in the year as the company builds operational capability, says Drury. “It is something we can use when we are ready for our more unrestrained launch.”
The company is preparing to list on the NZX next Tuesday, 5 June, with its initial public offering having closed on Wednesday. It planned to raise $15 million, excluding oversubscriptions, through the offering.
While unable to reveal any specifics, Drury says the offering has gone very well.
“It is all looking very positive and it is very exciting.”
The funds raised will enable Xero to become the first, properly-funded software company to come out of New Zealand, he claims.
“The big thing about Xero is that probably for the first time we are actually doing a lot of R&D and some real investment upfront – we are funding the business properly to build something globally.”
Drury says all his previous ventures, such as Aftermail, which was sold to US-based Quest software in 2005 for US$45 million, involved a race to revenue. With Xero he invested a large amount of the proceeds from the Aftermail sale to fund product development upfront.
“We have been able to do things right – build the foundations and a fantastic team.”
Winning the Technium Challenge, meanwhile, is a confirmation of Xero’s international expansion plans, says Drury. “It is a really good validation of the fit for Xero in the UK market.”