Xero raises $180m for US development, global growth
- 14 October, 2013 09:26
Online accounting software developer, Xero, has raised $180 million in new capital to continue building its United States-based team while also supporting global growth.
While New Zealand investors account for $33m of the total, the remaining $147m comes from US investors. This includes existing shareholders Matrix Capital Management ($US15m) and Valar Ventures ($US5m), among other parties which Xero did not name, although claims are "some of the most enduring and well-capitalised asset management firms in the world."
The transactions are priced at $18.15 per share for 9.92 million shares, representing eight per cent of the shares on issue after the raise, and leaving Xero with $230m cash on hand.
“Xero is emerging as the definitive software platform for small business worldwide,” Matrix Capital Management managing member, David Goel, said.
“Having empowered hundreds of thousands of small and medium-sized businesses in NZ, Australia and the United Kingdom, Xero is poised to do the same for its 29 million potential customers in the US. We are adding our investment to help facilitate and accelerate this goal.
Xero’s software platform presently supports more than 211,000 customers globally, with the assistance of accountant and bookkeeper partners. The vendor has spent the past two months hosting partner conferences in Australia, the US, and the UK, and claims to be seeing acceleration in the acceptance and adoption of its products.
Earlier this month, the company reported annualised monthly committed revenue of $70.6m as at September 30, up from $38.7m a year earlier. It expects its operating revenue to exceed $30.3m for the six months to September 30, up 84 per cent over the same period last year.