New Zealand cloud accounting software startup Xero has announced that it has raised an investment of US$111 million (AU$127 million) from US venture capital firms Accel Partners and Matrix Capital.
Accel Partners, a Silicon Valley firm specialising in early stage and growth investments, has agreed to invest US$100 million at just over $15 per share, while current investor Matrix Capital is investing a further US$10.8 million.
Xero stated that the funds raised will be used to fuel its growth and innovation globally. In particular, Xero will be looking to spur growth in the United States and the United Kingdom.
As part of this focus on expansion, Xero has appointed Russell Fujioka president of its US operations. Fujioka will be based at Xero’s San Francisco office. Former Salesforce CFO Graham Smith has also joined Xero’s board as an independent, non-executive director.
“Our ability to attract capital and leadership of this caliber is testament to our success and our potential to become the small business SaaS platform of choice for entrepreneurs around the globe,” said Rod Drury, Xero CEO.
Andrew Braccia, a partner at Accel, said the firm invested because it saw the potential for Xero’s platform to help millions of small businesses grow.
“We’ve worked with several other leading companies in the region to broaden their global reach and we hope this experience will be valuable as Xero’s strong leadership team looks to expand in the United States,” Braccia said.
Founded in 2006, Xero has almost cemented itself as the accounting software of choice for startups across Australia and New Zealand, while also taking a slice of MYOB’s share of the small business market.
With figures from Xero showing that over 160,000 of its 400,000 users are based in Australia, there is much potential for growth in America – though the company will face stiff competition from the US accounting software giant Intuit.
The investments from both Accel Partners and Matrix Capital are expected to close in March.