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 http://www.xero.com/us/roadshow.
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. http://www.xero.com/us/
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 securities.
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/
Contact: President, Xero US Jamie Sutherland (415) 806-1107 Jamie.Sutherland@xero.com
Media Contact: Bill Bode Highwire PR (415) 963-4174, ext. 49 Xero@highwirepr.com