Xero's trading halt on ASX attributed to revenue raising
- 14 October, 2013 13:48
Following Xero’s recent trading halt on the ASX, the accounting software company has announced AUD$158 (NZ$180) million of new capital.
At the time, Xero revealed to ARN that the trading halt was due to a capital raise related to the firm’s growth strategy, though an amount was not named.
The AUD$158 million of new capital comes from both US and New Zealand investors, as well as existing shareholders Matrix Capital Management and the Peter Thiel backed Valar Ventures.
Xero Australia Managing Director, Chris Ridd, said the additional funding comes as the software copany has $200m in the bank and no debt.
“Xero is in a far sounder financial position than our competitors in the Australasian market,” he said.
“We will continue to build a world class team and invest in our pure cloud accounting software model.”
Following the raise, the transactions are priced at AU$16 (NZ$18.15) per share for 9.92 million shares representing 8 per cent of the shares on issue.
Local customer base
Ridd said Xero’s client base in Australia has grown to 79,100 paying customers, which he said proves that SMBs want an alternative to traditional desktop solutions.
“Our popularity in Australia has given our shareholders confidence that we can replicate the same aggressive growth strategy in the US,” he said.
The news of additional funding comes as Xero begins its October roadshow around the country to meet and greet with new customers.
Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.