PayPal founder Peter Thiel has laid down NZ$4 million to buy into New Zealand-based web 2.0 accountancy play Xero, in a move that will also see Thiel join Xero's US advisory board.
Xero was founded in July 2006 by serial Kiwi entrepreneur Rod Drury and small business accountant Hamish Edwards. It has since gone from strength to strength, building revenues and listing on the New Zealand stock exchange. The company provides online accounting software that doesn't require its clients to install anything on their PC.
US-based Thiel is best known for co-founding PayPal, now owned by eBay, but was also an early investor in Facebook and sits on the social-networking giant's board. He is the president of hedge fund Clarium Capital and a managing partner in another venture capital fund called the Founders Fund.
In a statement today, Xero said that Thiel's funds would be invested in Xero through Valar Ventures, Thiel's New Zealand investment firm. The company, according to Xero's statement, focuses on helping New Zealand companies in the post-revenue phase move into global markets, but Xero is its first investment.
"Millions of small and medium-sized businesses need an online accounting solution, especially in this time of increasing regulatory and tax complexity," said Thiel. "Xero's tight focus, robust product and strong team should enable it to expand tremendously in the United States."
Xero chief executive Drury said that access to Thiel's "extensive networks" would provide Xero with a major boost in the US as the company took on the QuickBooks monolith owned by Intuit.
The fist member of Xero's advisory board in the US is Andy Lark, a Kiwi who is also senior vice president of global marketing for large enterprises at giant manufacturer Dell.
The company also has an existing relationship with Yodlee, a US-based personal financial management and payments solutions firm, to provide automated daily bank account feeds into Xero. This means, according to Xero, that its global reach now includes connectivity with 11,000 financial institutions and "other account sources".