Xero (software)

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Xero Limited
Public
Traded asASXXRO
IndustrySoftware as a Service (Saas)[1]
FoundedNew Zealand (2006)
HeadquartersWellington, New Zealand
Key people
Steve Vamos (CEO), Rod Drury (Founder, former CEO)[2]
ProductsAccounting software
RevenueNZD$407 million (2018)[3]
Number of employees
2021 (March 31, 2018)[4]
Websitewww.xero.com

Xero is a New Zealand domiciled public software company that offers a cloud-based accounting software platform for small and medium-sized businesses. The company has offices in New Zealand, Australia, the United Kingdom,[5] the United States, Canada, Asia and South Africa.[6] It is listed on the Australian Securities Exchange.[1]

Its products are based on the software as a service (SaaS) model and sold by subscription, based on the type and number of company entities managed by the subscriber.[7]

Its products are used in over 180 different countries.[8][citation needed]

History[edit]

Xero was founded by Rod Drury and his personal accountant when they felt that traditional desktop accounting software had become outdated and decided to create a modern cloud-based product.[2] Xero Limited was officially formed in 2006 in Wellington, New Zealand where its global headquarters are still located.[9] The company entered the Australian market and the United Kingdom in 2008,[10] and United States in 2011.[11] In March 2016, Xero opened its first Asia office in Singapore and two years later in March 2018, the second Asia office in Hong Kong. In May 2018, Xero launched its cloud accounting software platform in Canada.[12]

Rod Drury announced he would be stepping down as CEO in March 2018, with Steve Vamos entering the role in April 2018.[13]

In June 2018, Xero updated its tagline from ‘beautiful accounting software’ to ‘beautiful business’.[14]

Funding[edit]

Xero went public on the New Zealand Exchange on June 5, 2007 with a $15 million (NZD) IPO, gaining 15% on its first trading day.[15] Drury decided to list on the NZX rather than receive investment from Silicon Valley in order to avoid being pressured into selling to a larger competing company.[5] The company focused on the New Zealand market and product and development for its first five years before entering other markets.[5] It went public on the Australian Securities Exchange on November 8, 2012.[1] Xero transitioned to a sole listing on the ASX on February 5, 2018, delisting from the NZX on February 2, 2018. January 31, 2018 was the last day Xero shares were traded on the NZX.

Xero has also received funding from various investors. In 2009, it closed a $23 million (NZD) round of funding led by MYOB founder Craig Winkler.[16] It raised an additional $4 million (NZD) in 2010 from Peter Thiel's Valar Ventures,[17] who also invested an additional $16.6 million (USD) in February 2012.[18] It raised $49 million in a funding round in November 2012 with the largest amounts coming from Peter Thiel and Matrix Capital. It was reported by PandoDaily that the company has raised more than $100 million and had a valuation of approximately $1.4 billion on the NZE as of May 2013.[5][19] This was prior to the company receiving an additional $180 million (NZD) from Thiel and Matrix in October 2013, bringing total funding to more than $230 million.[20] Xero raised an additional $100 million from Accel and $10.8 million from Matrix Capital in February 25, 2015.[21]

Acquisitions[edit]

Xero has acquired several companies since its launch. In July 2011, the company acquired Australian online payroll provider Paycycle for a mixture of cash and shares totaling $1.9 million (NZD). The acquisition allowed Xero to integrate payroll into their Australian product offering.[22] It acquired Spotlight Workpapers in July 2012 for a mixture of cash and shares totaling $800,000.[23] The same year it acquired online job, time and invoice management solution WorkflowMax for cash and shares totaling $6 million (NZD).[24][25]

Product[edit]

The key features of Xero include automatic bank and credit card account feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, and standard business and management reporting. Xero can automatically import bank and credit card statements.[26] It offers a free API that enables customers and 3rd-party software vendors to integrate external applications with Xero. Over 275 3rd-party software vendors have built Xero add-ons.[27] Xero also supports multiple tax rates and currencies.[28] It also incorporates a payroll feature and a projects feature. Additionally, users can access local teams in New Zealand, Australia, Europe and the United States.

All financial data is stored in the cloud on a single unified ledger, allowing users to work in the same set of books regardless of location or operating system.[29] Fast Company featured the software's UI design in a 2012 article, stating that the design is simple and makes it easy for users to get an at-glance idea of real time financial situations.[30] In 2011, Xero released the Xero Touch mobile apps for iOS and Android devices,[31] allowing users to issue invoices while on-site with clients.[32] On August 16, 2016, Xero announced they are partnering with PayPal to allow invoices to be paid via Paypal directly from the invoice.[33]

Awards and recognition[edit]

In 2007, Xero received the Overall Partner Solution of the Year for Small Business and was also featured as part of a Microsoft case study.[34] The company was the recipient of two Webby Awards in 2009, including the People's Choice Award for Banking/Bill Pay.[35][36] They were honorees of the 2010 Webby Awards for Web Services & Applications.[37] They received a Fast Company Innovation by Design Award in 2012[38] and was recognized as one of the 10 Smart Financial Apps to Solve Small Business Accounting Challenges by YFS Magazine in 2013.[39][40] Additional awards in 2013 included the Awesome Application Award from the Sleeter Group[41] and the New Zealand Company of the Year from Hi-Tech.[42] In June 2014, Xero topped the Forbes magazine "100 most innovative growth companies" list.[43] Also in 2014, the company was named one of Macworld's recommended online business accounting apps.[44] In January 2015, Xero was named best accounting software, with a score of 83, in the Cloudswave Awards,[45] and for the second time, named New Zealand's company of the Year from Hi-Tech. Xero won Product of the Year at the 2017 British Accountancy Awards and also won Best Overall Fintech platform by the Fintech Breakthrough Awards in 2017. The company was rated by Canstar Blue as Australia’s best accounting software four consecutive years from 2015-2018.

See also[edit]

References[edit]

  1. ^ a b c Barwick, Harrish (8 November 2012). "NZ-based SaaS provider Xero lists on ASX". Computer World. Retrieved 15 January 2014.
  2. ^ a b Laugesen, Ruth (17 October 2013). "From Xero a hero". New Zealand Listener (subscription required). Retrieved 15 January 2014.
  3. ^ "Xero Limited 2016 Annual Report" (PDF). Retrieved 24 May 2016.
  4. ^ "Xero Limited 2018 Interim Report" (PDF). Retrieved 17 March 2018.
  5. ^ a b c d McKenzie, Hamish (1 May 2013). "Xero: A billion-dollar software company that had five years in stealth at the bottom of the planet". Pando Daily. Retrieved 15 January 2014.
  6. ^ Campbell, Anita (13 October 2013). "Small Biz Accounting Software Space Heats Up As Xero Raises $150 Million". Small Biz Trends. Retrieved 15 January 2014.
  7. ^ Robins, Brian (6 November 2013). "Sharemarket darling Xero dubbed 'Apple of accounting'". The Sydney Morning Herald. Retrieved 15 January 2014.
  8. ^ "Xero grows to $1 Billion revenue - Enterprise Times". Enterprise Times. 2016-07-20. Retrieved 2018-05-30.
  9. ^ Calvey, Mark (10 October 2013). "New Zealand accounting software company expanding to Denver". Denver Biz Journal. Retrieved 15 January 2014.
  10. ^ "Xero Chairman's Address for 2009 Annual Meeting" (PDF). XERO. 23 July 2009. Retrieved 24 May 2016.
  11. ^ "Chairman's Address for 2011 Annual Meeting" (PDF). XERO. 21 July 2011. Retrieved 24 May 2016.
  12. ^ "Xero launches in Canada". Accounting Today. Retrieved 2018-05-30.
  13. ^ McLean, Asha. "Xero founder Rod Drury steps down as CEO | ZDNet". ZDNet. Retrieved 2018-07-24.
  14. ^ "Xero announces new tagline: 'Beautiful business' | Scoop News". www.scoop.co.nz. Retrieved 2018-07-24.
  15. ^ Niesche, Christopher (6 June 2007). "Xero begins strongly". New Zealand Herald. Retrieved 15 January 2014.
  16. ^ Smith, Robert (7 April 2009). "MYOB founder helps Xero raise $23m for global push". National Business Review. Retrieved 15 January 2014.
  17. ^ Wauters, Robin (22 October 2010). "Peter Thiel Invests $3 Million In Xero To Support Its US Expansion". Tech Crunch. Retrieved 15 January 2014.
  18. ^ Wauters, Robin (3 February 2012). "Small business accounting service Xero raises $16.6M". Venture Beat. Retrieved 15 January 2014.
  19. ^ Williams, Alex (29 November 2012). "Peter Thiel And Existing Investors Put Another $49 Million In Accounting Software Company Xero". Tech Crunch. Retrieved 15 January 2014.
  20. ^ Lunden, Ingrid (13 October 2013). "Xero Zeros In On Another $150M To Do Battle With Intuit In The World Of Online SMB Accounting Software". Tech Crunch. Retrieved 15 January 2014.
  21. ^ "Xero Attracts World-Class Investment and Talent to Fuel Growth" (PDF). Xero. Retrieved 25 February 2015.
  22. ^ Rogers, Claire. "Xero buys payroll firm to boost Aust growth". Stuff.co.nz. Retrieved 19 September 2013.
  23. ^ "Xero's latest acquisition a 'compelling' one for accountants". Idealog. Retrieved 19 September 2013.
  24. ^ Kepes, Ben (1 February 2012). "Xero Raises Another Round and Acquires WorkFlowMax". Diversity Limited. Retrieved 17 January 2014.
  25. ^ Hammond, Michelle. "Xero acquires Max Solutions after raising $15m". Startup Smart. Retrieved 19 September 2013.
  26. ^ Lam, Greg (2 July 2013). "Cloud Accounting Comparison – Data Import and Export". Sleeter. Retrieved 16 January 2014.
  27. ^ McKenzie, Hamish. "Xero: A billion-dollar software company that had five years in stealth at the bottom of the planet". PandoDaily. Retrieved 19 September 2013.
  28. ^ Lam, Greg. "Xero Review". The Small Biz Doer. Retrieved 19 September 2013.
  29. ^ Gorham, Tom. "Xero review". PC Pro. Retrieved 16 January 2014.
  30. ^ LaBarre, Suzanne (25 February 2012). "Xero Reinvents Accounting For Small Businesses, With Superb UI Design". Fast Code Design. Retrieved 15 January 2014.
  31. ^ Fineberg, Seth. "Xero Debuts Mobile App for Android". Accounting Today. Retrieved 9 September 2013.
  32. ^ Smith, Heather (23 May 2013). Xero For Dummies. John Wiley & Sons. p. 35. ISBN 978-1-118-57252-8.
  33. ^ Gagliordi, Natalie. "Xero teams with PayPal for streamlined invoice payments | ZDNet". ZDNet. Retrieved 2016-08-24.
  34. ^ "Software Developer Improves Service Levels With Superior Database Technology, Flexible Licenses". Microsoft Corporation. 10 September 2007. Retrieved 16 January 2014.
  35. ^ Hall, Mitchell (6 May 2009). "Hyperfactory and Xero big winners at 'online oscars'". The National Business Review. Retrieved 15 January 2014.
  36. ^ McBeth, Paul (22 October 2010). "PayPal founder pumps $4 million into Xero". Scoop. New Zealand. Retrieved 15 January 2014.
  37. ^ "2010 – 14th Annual Webby Awards – Award List". The Webby Awards. 2010. Retrieved 15 January 2014.
  38. ^ LaBarre, Suzanne. "2012 Innovation By Design Awards: Service Design". Fast Company. Retrieved 17 January 2014.
  39. ^ "10 Smart Financial Apps to Solve Small Business Accounting Challenges". 4 January 2013. Retrieved 15 January 2014.
  40. ^ Administrator (21 January 2017). "Is xero online accounting suitable for small business". www.digitalgrog.com.au. Retrieved 16 March 2017.
  41. ^ "Awesome Application Award Winners 2013". Retrieved 17 January 2014.
  42. ^ "Xero and Vend big winners at NZ Hi-Tech Awards 2013". National Business Review. 18 May 2013. Retrieved 15 January 2014.
  43. ^ "Most Innovative Growth Companies". Forbes, June 2014
  44. ^ "Top Choice: Our favorite online-based business accounting apps".
  45. ^ "The 10 Best Accounting Software 2015 According to Cloudswave". Cloudswave Blog. Retrieved 2015-10-26.

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