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The money will be used to grow the U.S. business, where Xero has recently seen tremendous growth
Cloud-based accounting software provider Xero has raised $150 million (NZ$180 million) in a new funding round, it was announced on Sunday.
The funding came from existing investors Valar Ventures, which is backed by Peter Thiel, and Matrix Capital. The round also included other, unnamed, investors in both the United States and New Zealand.
This is Thiel’s fourth investment in the online accounting software company. He previously invested NZ$4 million (around $3 million U.S. dollars) into the company in October 2010, also joining Xero’s US Advisory Board. In February 2012, Xero raised another NZ$20 million (around $16 million USD) from existing Directors and major shareholders, including Thiel. Most recently, in November 2012, Thiel, along with Matrix, invested $49 million in the company.
In total, Xero has raised roughly $230 million in U.S. dollars.
The money will be used to "to continue building a world-class team in the US market and support continued global growth." How many people, and what exactly Xero plans to do to expand the business, are not made clear. VatorNews has reached out to Xero to find out more, and we will update if we learn anything new.
Founded in New Zealand in July 2006 by technology entrepreneur Rod Drury and specialist small business accountant Hamish Edwards, Xero is a competitor with Quickbooks: it provides accounting software for small businesses and their advisors.
The service allows its customers to see their cashflow in real time, to automatically import and code their bank statement, create and send invoices automatically, and to get paid online. With Xero, businesses can be connected directly to the banks, and offers a dashboard where all the business' transactions appear in a real time view.
Xero has offices in New Zealand, Australia, the United Kingdom and the United States, where it is based in San Francisco. The company is listed on both the New Zealand Stock Exchange and the Australian Securities Exchange.
Xero has been seeing some serious growth in the first half of of 2013. Earlier this month it reported operating revenue it of $30.3 million, compared to $16.5 million for the same period in 2012, growth of 84% year to year. It also saw 211,300 paying customers as of the end of September, up 89% from 111,800 the year before.
And you can see why the company is so heavily interested in the United States: the number of paying customers in the country jumped 141% year to year, second only to Australia's 143%.
Xero first entered into the U.S. market in 2011 and it should be noted that U.S. investors are taking a big intest in the company; they accounted for $123 million (NZ$147 million) of the latest fund raising round.
The service is available in more than 100 countries around the world.
(Image source: https://pandodaily.com)
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