For the second consecutive year, New Zealand-based software company Xero topped Forbes’ list of Most Innovative Growth Companies of 2015.
Founded on 2006, Xero Ltd. provides online accounting and business services to small and medium sized enterprises. It garnered an innovation premium score of 90.11%, which was followed by another strong Software as a Service (SAAS) player, Net Suite. Xero’s 5-year average sales growth was at 112.2% and has an enterprise value of $2 billion.
It has been a successful financial year for Xero as they had significant growth in a number of areas: they have become one of the fastest growing SAAS companies as their subscription revenue grew by 81 percent
to $120.9m. Likewise, their operating revenue increased by 77 percent to $123.9. It has also released over 400 updates in the past year, proving its dedication to continual innovation.
While most rankings are popularity-based, American business magazine Forbes used a different method in ranking the World’s Most Innovative Growth Companies list. It relied on investors’ ability to identify firms they expect to be innovative now and in the future. The companies were ranked by their innovation premium, the difference between their market capitalisation and a net present value of cash flows from existing businesses (based on a proprietary formula from Credit Suisse HOLT).
It has also made repeat appearances on the Deloitte Fast 50, an annual index of the fastest growing companies in New Zealand, with its highest placing at number four with a growth rate of 873.64 per cent in 2011.
Xero has emerged as the leading cloud accounting solution in three countries – New Zealand, Australia and United Kingdom. It further claimed that if you added up their customers in those three markets, they would exceed the total cloud customers of the incumbents in those markets, too.
Over the years, Xero has built relationships with over 16,000 accounting and bookkeeping partners, and now connects to over 7,500 bank feeds with more than 5,000 financial institutions globally. It has meant a lot for them to be accredited as an innovative leader in the industry. “It’s awesome to be recognised. More importantly, it’s yet another acknowledgement that we are building a truly innovative, competitive, global company with a strategy that will disrupt the incumbents and create enormous value,” said chief executive Rod Drury.
With the steady success of the company, Xero’s customers will be assured of more innovative accounting experience.
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