Accounting upstart Xero raises NZ$180m

Summary:Share price spikes as successful capital raising to fund global growth is finalized.

Shares in NZX-listed online accounting software developer Xero have spiked following its announcement of a successful NZ$180 million raising of new capital from a range of US and New Zealand investors.

Investors include existing shareholders Matrix Capital Management and the Peter Thiel backed Valar Ventures. Xero issued 9.92 million shares to the investors at NZ$18.15 representing 8% of the shares on issue after the raise.

Xero says it has over 211,000 customers globally using its online systems. These are mainly micro and small businesses.

Earlier this month it reported annualised monthly committed revenue of NZ$70.6m as at 30 September 2013, up from NZ$38.7m a year earlier. It expects operating revenue to exceed NZ$30.3m for the 6 months to 30 September 2013, up 84% over the same period last year.

Xero will have over NZ$230m cash on hand after the raising.

“Xero has had seven years to build the best global accounting platform,” chief executive and founder Rod Drury says. “That investment puts us in a strong position as the cloud market accelerates.”

Xero’s system offers accounting, bank reconciliation, invoicing and a number of add-ons from its own products or from partners.

Topics: Cloud, Software

About

Rob O'Neill is a writer for CBS Interactive based in Auckland, New Zealand covering business and enterprise technology for ZDNet. He has previously worked for IDG, The Sydney Morning Herald and Melbourne's The Age as well as various business titles, most recently editing the Business Sunday section of New Zealand's weekly national news... Full Bio

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