Member Article

Xero raises £90m for global growth

Xero, the global leader in online accounting software, has raised £90 million of new capital from a range of investors including existing shareholders Matrix Capital Management and the Peter Thiel backed Valar Ventures.

The new funding will further enable the company to take on the FTSE100 listed Sage Group and accelerate its UK expansion and market presence.

The transactions are priced at £9.46 per share for 9.92 million shares representing 8% of the shares on issue after the raise. Following the raise Xero will have over £120m cash on hand. 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. In addition to Matrix and Valar, the investors represent some of the most enduring and well-capitalized asset management firms in the world.

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 democratized 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.“

The company opened its second UK office in London in last month and announced it had attracted more than 30,000 UK businesses to its online accounting platform, with 1,200 UK accounting and bookkeeping practices also embracing its cloud technology.

A CensusWide survey commissioned by Xero in September 2013 found a surge in uptake of cloud technology, with 55% of UK accounting practices either having already switched or planning to switch to the cloud to cut costs and improve practice efficiencies.

Gary Turner, managing director at Xero UK says “The migration to the cloud by UK businesses and their accountants is accelerating. In the last 12 months we have seen the number of British businesses using Xero double to 30,000 and over the same period more than £8 billion worth of business was conducted on Xero’s cloud platform by Xero customers in the UK. These trends are very encouraging and signal that the time is right accelerate investment to support our long term mission to lead the market for affordable cloud-based accounting software in the UK and globally.”

For more, watch Xero UK Managing Director Gary Turner and Xero CEO Rod Drury on Vimeo.

Video media organizations, you can download additional video from Box

This was posted in Bdaily's Members' News section by Teradata .