Xero Raises $150 Million to Continue Rapid US Expansion

Xero Raises $150 Million to Continue Rapid US Expansion 
Matrix Capital and Peter Thiel's Valar Ventures Join Round to Fuel
Growth for Online Accounting Leader 
SAN FRANCISCO, CA -- (Marketwired) -- 10/14/13 --  Xero, the global
leader in online accounting software, has raised US$150 million of
new capital from existing shareholders Matrix Capital Management,
Peter Thiel backed Valar Ventures and a range of other US and New
Zealand investors. The new funding will empower the company to take
on incumbent QuickBooks provider Intuit and accelerate its rapid
growth and market adoption. 
The transactions are priced at US$15.10 per share for 9.92 million
shares representing 8% of the shares on issue after the raise. 
US investors account for $123 million of the capital raised. In
addition to Matrix and Valar, the US investors represent some of the
most enduring and well-capitalized asset management firms in the
world, all of whom will assist the company with its strategy and
execution in the US market. 
Over the last two months, the company has held partner conferences in
Australia, the US, and the UK and is seeing an 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. 
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 funding comes as Xero is experiencing record year-over-year
growth. Customer numbers more than doubled in its United States /
Rest of World region (excluding United Kingdom, Australia and New
Zealand), with 141% growth to September 30, 2013. 
Xero's US headquarters in San Francisco recently moved to a new
state-of-the-art, 25,000 square foot facility, providing capacity for
future growth for core US sales, marketing and development teams. The
company now has 100 employees across the US including locations such
as Los Angeles, New York and Austin, and is opening a new office
today in Denver that bolsters the US Customer Experience team and
Xero's global 24/7 support. 
Xero's affordable and easy-to-use cloud-based accounting services are
now in use by more than 210,000 customers and 8,800 accountant
partners globally. The company is driving and tapping into demand
from accounting professionals to manage their clients' finances in
the cloud. A recent US survey commissioned by Xero revealed 43% of
accountants are looking to offer new cloud services, highlighting the
market potential. 
"Xero's continued global momentum is proof that the accounting
industry is embracing the cloud and moving away from traditional
desktop solutions," says Jamie Sutherland, Xero US President. "This
new capital will help us to continue our mission of bringing powerful
and accessible financial and billing systems to small businesses and
their financial advisors anytime, anywhere." 
This news also closely follows the launch of Xero's much anticipated
QuickBooks Conversion service, which is the first to resolve the
industry hurdle of comprehensive data migration to a non-Intuit
system. Xero will be demonstrating this service and its introduction
of seamless payroll during its upcoming roadshow, which begins
October 21 in Baltimore and spans 20 cities over the next month. For
more details on when Xero will be in your town, visit
For more, watch Xero US President Jamie Sutherland and Xero CEO Rod
Drury on Vimeo. 
Video media organizations, you can download additional video from Box 
About Xero
 Xero is beautiful, easy to use online accounting software
for small businesses and their advisors. The company has over 210,000
paying customers in more than 100 countries around the world.
Recently Xero garnered a five-star review for Software As Service
from CPA Practice Advisor. The Xero US team is headquartered in San
Francisco. Xero is hosted with Rackspace in Chicago. 
See www.xero.com to learn more and visit Small Business Guides to
gain insight on how to grow your small business http://www.xero.com 
About Matrix Capital Management
 Matrix Capital Management is an
investment advisor registered with the United States Securities and
Exchange Commission and is based in Waltham, Massachusetts, just
outside of Boston. Founded in 1999 by David E. Goel and Paul J.
Ferri, the fund primarily invests in publicly traded equity
securities with a focus on developing a deep and detailed "bottom-up"
analysis of each company in its portfolio. Under Mr. Goel's
stewardship as the Managing Member, Matrix takes the long view of
investing. This strategy involves developing high conviction in
companies based on its particularised research into their
fundamentals, and combining that knowledge with a differentiated
understanding of the sectors in which they do business. Over its
fourteen-year investment history, Matrix has specialised in companies
that use technology to disrupt or disintermediate business models,
while cultivating specialised experience in the technology,
media/telecom and consumer sectors.  
Within the technology sector, Matrix has been extensively involved in
several sub-segments: software-as-a-service, cloud infrastructure,
payments, e-commerce, social media, mobile data, and streaming video.
Over the last two decades, the Matrix investment team has built
relationships with executives and entrepreneurs in these areas who
help Matrix identify and evaluate potential investment opportunities.
Matrix's strategy is to invest in a concentrated portfolio of
attractively-valued companies whose innovative ideas, strong
fundamentals, and visionary management teams position them to grow
over multiple years. Matrix invests a significant amount of time and
resources in developing high conviction in each of its positions,
holding to a deliberate strategy designed to generate strong, durable
returns over time. 
This above information about Matrix Capital Management does not
constitute an offer to sell or solicitation of an offer to buy any
About Valar Ventures 
 Valar Ventures is a global venture capital
firm backed by Peter Thiel. Based in San Francisco, Valar invests
exclusively in companies outside of the United States. Valar believes
that over the next decade an increasing number of transformative
technology companies will be started outside of the US, and that the
founders of those companies will benefit from having a US partner
that understands their unique challenges and opportunities and can
help them access US networks.
 See http://www.valarventures.com/ 
President, Xero US
Jamie Sutherland
(415) 806-1107
Media Contact:
Bill Bode
Highwire PR
(415) 963-4174, ext. 49
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