New Zealand-based cloud accounting software Xero has raised a total of NZ$ 147.2 million in funding from new investor Accel Partners, as well as from current shareholder Matrix Capital Management.
Accel Partners, a Silicon Valley venture capital firm, has invested $132.9 million at $20 per share through a number of funds it manages. Meanwhile, Xero’s largest institutional investor Matrix Capital Management topped up its own investment with an additional $14.3 million, boosting the company’s cash balance to approximately $285 million, from around $140 million beforehand.
According to Xero CEO Rod Drury, “We welcome the Accel Funds as strategic investors in Xero, and are delighted with Matrix’s continued support.” “Our ability to attract capital and leadership of this caliber is testament to our success and our potential to become the small business SaaS platform of choice for entrepreneurs around the globe,” he added.
“Accel always looks for enduring technologies with global reach and we see the need and opportunity for millions of small businesses to grow on Xero’s platform,” said Andrew Braccia, partner at Accel. He added, “We’ve worked with several other leading companies in the region to broaden their global reach and we hope this experience will be valuable as Xero’s strong leadership team looks to expand in the United States.”
Meanwhile, Xero’s shares jump 21% after obtaining additional funding, increasing $4.75 to $23.00. This marks their highest record since September, and a huge improvement since its rollercoaster experience last year when its share price dipped from a high of $45.99 in March to as low as $15 last October. The proceeds secured are reportedly to be used in strengthening their market in the US and the UK.
Concomitantly, this news came with the announcement that Dell executive Russell Fujioka will replace North American chief executive Peter Karpas. He will be in charge for sales, digital marketing, and operational management. As he takes over the role, Fujioka will be implementing a new direction in growing the company’s U.S. share as it has lagged behind Xero’s success in native New Zealand and Australia. Last November, Xero acquired Seattle-based cloud accounting start-up Monchilla to further reinforce its presence in the US.
Xero, founded in 2006 by Drury, is a cloud-based accounting software for entrepreneurs. It allows a user to create invoices, pay bills and wages, reconcile bank accounts and a number of other functions required to run a small business.
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