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

 


CORRECTION US investors pour $82M into Xero

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

(Corrects sums received by directors in sell-down in second paragraph)

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 $15 million, $5 million, and $2 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

 

Company Results: Air NZ Rides The Tourism Boom With Record Full-Year Earnings

Air New Zealand has ridden the tourism boom and staved off increased competition to deliver the best full-year earnings in its 76-year history. More>>

ALSO:

New PGP: Sheep Milk Industry Gets $12.6M Crown Funding

The Sheep - Horizon Three programme aims to develop "a market driven, end-to-end value chain generating annual revenues of between $200 million and $700 million by 2030," according to a joint statement. More>>

ALSO:

Half Full: Fonterra Raises Forecast Milk Price

Fonterra Co-operative Group Limited today increased its 2016/17 forecast Farmgate Milk Price by 50 cents to $4.75 per kgMS. When combined with the forecast earnings per share range for the 2017 financial year of 50 to 60 cents, the total payout available to farmers in the current season is forecast to be $5.25 to $5.35 before retentions. More>>

ALSO:

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news