Posted on 14-Oct-2013 08:55.
Filed under: News
Xero Limited has raised NZ$180 million of new capital from a range of US and New Zealand investors including existing shareholders Matrix Capital Management and the Peter Thiel backed Valar Ventures.
The transactions are priced at NZ$18.15 per share for 9.92 million shares representing 8% of the shares on issue after the raise.
Xero has built a powerful software platform supporting over 211,000 customers globally, with the assistance of accountant and bookkeeper partners. Over the last two months, the company has held partner conferences in Australia, the US, and the UK and is seeing acceleration in the acceptance and adoption of its products. Accordingly, the Board decided to raise additional capital to continue building a world-class team in the US market and support continued global growth.
US investors account for NZ$147 million of the capital raised. In addition to Matrix and Valar, the US investors represent some of the most enduring and well-capitalised asset management firms in the world, all of whom will assist the company with its strategy and execution in the US market.
Xero earlier this month reported Annualised Monthly Committed Revenue of NZ$70.6m as at 30 September 2013, up from NZ$38.7m a year earlier, and expects its operating revenue to exceed NZ$30.3m for the 6 months to 30 September 2013, up 84% over the same period last year. Following the raise Xero will have over NZ$230m cash on hand.
David E. Goel, Managing Member of Matrix Capital Management, says “Xero is emerging as the definitive software platform for small business worldwide. Capturing the power and affordability of cloud-based computing, Xero has democratised accounting, payroll, and other business software that was once the privilege of only the largest companies. Having empowered hundreds of thousands of small and medium-sized businesses in New Zealand, Australia, and the United Kingdom, Xero is poised to do the same for its 29 million potential customers in the United States. We are adding to our investment to help facilitate and accelerate this goal.”
Xero CEO Rod Drury says “Xero has had seven years to build the best global accounting platform. That investment puts us in a strong position as the cloud market accelerates. The calibre of our investors and our strong cash position sends a clear signal of our aspirations to serve millions of small businesses around the world and attract the world’s best talent.”