Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


US investors pour $82M into Xero; early payday for founders

US investors pour $82M into Xero; interim payday for founders

By Pattrick Smellie

Nov. 30 (BusinessDesk) - Two American investors have increased their interest in cloud accounting software provider Xero by a total of $82 million, of which $60 million is newly issued capital and $22 million is to purchase of shares from its three largest shareholders.

The $22 million is split three ways between director Craig Winkler, chief executive Rod Drury, and co-founder Hamish Edwards, who will receive around $11.8 million, $7.4 million, and $2.5 million respectively for the sale of portions of their holdings at the transaction price of $6 a share.

At the same time, Peter Thiel-backed Valar Ventures of San Francisco will raise its holding in Xero to 7.0 percent from 3.9 percent, and Massachusetts-based Matrix Capital Management's stake will rise to 9.8 percent from 1.8 percent.

Winkler's interest in the fast-growing accounting software developer, which has global ambitions, falls to 15.7 percent from 19.5 percent, Drury goes to 18.5 percent from a 21 percent holding, and Edward's shareholding reduces to 4.9 percent from 5.7 percent.

"The board's decision to increase funding follows the announcement on Nov. 14 that Xero will accelerate its investment in the business to take advantage of market conditions," directors said in a statement to the NZX.

The company is loss-making at present, judging it better to invest in accelerated growth to capture market share in the massive, emerging global market for online, cloud-based business systems.

It reported $38.7 million in monthly revenues in November, up from $18 million a year earlier, a $7.7 million loss for the half year to Sept. 30, and an increased loss for the full year. It had $30.6 million cash in hand at Sept. 30.

A total of 10 million new shares have been issued at $6 a share, representing the 20-day volume-weighted average price at the time the transaction was negotiated. Xero shares rose 1.7 percent to $6.55 immediately after the announcement.

The purchase of existing shares was made in order to minimise dilution to existing shareholders, Xero's NZX statement said.

"We believe Xero is the global market leader in cloud-based small business accounting software," said David E Goel, managing member of Matrix Capital. "The future is in the cloud, Xero is there, and we want to be there."

Valar's Andrew McCormack said the investment firm, backed by Paypal co-founder and billionaire Peter Thiel, was confident that "Xero has a very long runway."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Fossils: Ancient Penguins Lived Alongside Dinosaurs?

Penguins are much older than previously thought and their evolution probably dates back to the days of the dinosaurs, according to research on the fossilised leg bone and toes of a giant ancient penguin found in rocks near Waipara, North Canterbury. More>>

No Voda/Sky: Commission Declines Clearance For Merger

The Commerce Commission has declined to grant clearance for the proposed merger of Sky Network Television and Vodafone New Zealand. More>>

ALSO:

EARLIER:

Power: IEA Report On New Zealand's Energy System

Outside of its largely low-carbon power sector, managing the economy’s energy intensity and greenhouse gas emissions while still remaining competitive and growing remains a challenge. More>>

ALSO:

NASA: Seven Earth-Size Planets Around A Single Star

NASA's Spitzer Space Telescope has revealed the first known system of seven Earth-size planets around a single star. Three of these planets are firmly located in the habitable zone, the area around the parent star where a rocky planet is most likely to have liquid water. More>>

ALSO:

Auckland Transport Case: Men Guilty Of Corruption And Bribery Will Spend Time In Jail

Two men who were found guilty of corruption and bribery in a Serious Fraud Office (SFO) trial have been sentenced in the Auckland High Court today... The pair are guilty of corruption and bribery offences relating to more than $1 million of bribes which took place between 2005 and 2013 at Rodney District Council and Auckland Transport. More>>

ALSO:

Hager Raid: Westpac Wrong To Release Bank Records To Police

The Privacy Commissioner has censured Westpac Banking Corp for releasing without a court order more than 10 months of bank records belonging to the political activist and journalist Nicky Hager during a police investigation into leaked information published in Hager's 2014 pre-election book, 'Dirty Politics'. More>>

ALSO:

EARLIER:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news