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Xero gets $NZ60m to account for
Kiwi accounting software house expands
Kiwi tech entrepreneur Rod Drury’s accounting software company Xero has attracted a further $NZ60m from existing backers Matrix Capital and Peter Thiel’s Valar Ventures.
The new cash is the third round of investment from the SaaS accounting outfit's US supporters and will go towards further expanding service, support and global operations in Australia, the UK and the US. Xero launched a San Francisco presence this year.
Drury said on his blog that the funding was a “huge endorsement” for the small business focussed software house. “We’re just at the beginning of the business SaaS market and we have the resources to keep our foot on the throttle. We look forward to winning market share from the big incumbents by introducing small businesses around the world to beautiful accounting software.”
As part of the transaction, the company’s three largest shareholders sold down their stakes with MYOB founder Craig Winkler now holding 15.7 per cent and pocketing $NZ15m and Xero co-founders and Drury selling down his stake from 21.0 per cent to 18.5 per cent for $NZ5m.
“Xero differentiates itself, not only as a model for accountancy, but also as a harbinger for where all software companies will have to go if they want to remain relevant. The future is in the cloud, Xero is already there, and we want to be there, ” said David E. Goel, Managing Member of Matrix Capital Management.
In addition to trading on the NZ stock exchange, Xero listed on the ASX in November. The company is investing in further application and operating infrastructure and said it would have 60 staff in Australia by Christmas. ®