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

 


Drury says Xero fund raising sends strong signal to rivals

UPDATED: Xero’s Drury says $180M capital raise ‘sends strong signal’ to competitors

Oct. 14 (BusinessDesk) – Rod Drury, founder of Xero, says the cloud-based accounting company $180 million capital raising from key US shareholders sends a strong signal to rivals that there are no constraints on the funds it needs to win global market share.

The Wellington-based company sold 9.92 million shares at $18.15 apiece, a 1.1 percent premium to their price last week, to Matrix Capital Management, Peter Thiel-backed Valar Ventures and other US investors. It lifted cash on hand rises to $230 million from the $55 million it disclosed as at Sept. 30.

“We’ve been trading on a pretty good valuation and this is a relatively small percentage of the company to give up for a safety net,” Drury told BusinessDesk. “It sends a strong signal to incumbents around the world that we have no constraints.”

“We now need to build the best global management team,” he said. “This is a further signal that we can get the best.”

Xero isn’t planning any acquisitions with the new capital and it is “more about building a war chest, building a tonne of options,” he said.

The sale represents 8 percent of the enlarged capital of the company and gives it a much wider cash buffer to fund growth as it chases 1 million customers, almost five times its current customer base of 211,000.

“Xero is emerging as the definitive software platform for small business worldwide,” David Goel, managing member of Matrix, said in the statement. “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 US. We are adding to our investment to help facilitate and accelerate this goal.”

Valar and Matrix last injected funds into Xero in November, with $60 million of new capital, while buying $22 million of shares from director Craig Winkler, Drury, and co-founder Hamish Edwards at the same time.

US investors accounted for $147 million of the funds raised and “represent some of the most enduring and well-capitalised asset management firms in the world, all of whom will assist the company with its strategy and execution in the US market.” it said.

The shares last traded at $17.95.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Farming: Alliance Plans To Start Docking Farmer Payments

Alliance Group, New Zealand's second-largest meat cooperative, plans to start withholding some stock payments to its farmers from next week to bolster its balance sheet and force suppliers to meet their share requirements. More>>

ALSO:

Gambling: SkyCity First Half Profit Rises 30%, Helped By High Rollers

SkyCity anticipates the Auckland business will benefit from government gaming concessions which were triggered on Nov. 11 in recognition of SkyCity’s $470 million Convention Centre development. Morrison said the concessions would allow the Auckland business to lift its activity during peak period, noting it had a record revenue week over the Christmas and New Year period. More>>

ALSO:

Money For Light: Kiwi Scientists Secure Preferential Access To Synchrotron

Science and Innovation Minister Steven Joyce today announced a three-year investment of $2.8 million in the Australian Synchrotron, the largest piece of scientific infrastructure in the Southern Hemisphere, to secure preferential access for Kiwi scientists. More>>

Telco Industry Report: Investment Hits $1.7 Bln A Year

Investment in the telecommunications sector is $1.7 billion a year, proportionately one of the highest levels in the OECD, according to a report released today on the status of the New Zealand sector. More>>

ALSO:

PGPs: New Programme Sets Sights On Strong Wool

A new collaboration between The New Zealand Merino Company (NZM) and the Ministry for Primary Industries (MPI), announced today, aims to deliver premiums for New Zealand's strong wool sector... More>>

ALSO:

Restrictions Lifted: No Further Tau Flies Found

The Ministry for Primary Industries (MPI) confirms that all restrictions on the movement of fruit and vegetables in Manurewa, Auckland, due to the Tau fly, have been lifted as of 2.26pm on Sunday 7 February. More>>

Crowdfinding: Awaroa Beach To Become Public Land If Appeal Succeeds

Conservation Minister Maggie Barry says a privately-owned beach will become part of the Abel Tasman National Park if an online crowdfunding campaign to buy it succeeds... More>>

ALSO:

Meat Workers Union: Waitangi Mondayisation Flaunted By Large Employer Of Maori

At the AFFCO Talley owned meat plant in Rangiuru, the company has resorted to bullying and threats... saying they could be disciplined and their union sued for an unlawful strike if workers exercise their rights to a paid day off tomorrow. More>>

Earlier:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news