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Xero (company)

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Xero Limited
Company typePublic
NZX: XRO, ASX: XRO
IndustrySoftware as a Service (Saas)[1]
FoundedNew Zealand (2006)
Headquarters
Wellington
,
New Zealand
Key people
Rod Drury (CEO),[2]
Chris Liddell (Chairman)[3]
ProductsAccounting software
RevenueNZD$70.1 million (2014)[3]
Number of employees
1000 (October 9, 2014)[3]
Websitewww.xero.com

Xero is a New Zealand-based software company that develops cloud-based accounting software for small and medium-sized businesses. The company has offices in New Zealand, Australia, the United Kingdom[4] and the United States.[5] It is listed on both the New Zealand Exchange[6] and 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]

History

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founded by Rod Drury and his personal accountant when they felt that traditional desktop accounting software had become outdated and decided to create a modern cloud-based product.[2] Xero Limited was officially formed in 2006 in Wellington, New Zealand where its global headquarters are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.[8] The company entered the Australian market in 2011,[9] and the United Kingdom[10] and United States in 2012.[11]

Funding

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.[6] Drury decided to list on the NZE rather than receive investment from Silicon Valley in order to avoid being pressured into selling to a larger competing company.[4] The company focused on the New Zealand market and product and development for its first five years before entering other markets.[4] It went public on the Australian Securities Exchange on November 8, 2012.[1]

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.[12] It raised an additional $4 million (NZD) in 2010 from Peter Thiel's Valar Ventures,[13] who also invested an additional $16.6 million (USD) in February 2012.[14] 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.[4][15] 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.[16]

Acquisitions

Xero has acquired numerous 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.[17] It acquired Spotlight Workpapers in July 2012 for a mixture of cash and shares totaling $800,000.[18] The same year it acquired online job, time and invoice management solution WorkflowMax for cash and shares totaling $6 million (NZD).[19][20] Xero entered the US market in 2013.[21]

Personnel

New Zealand

Until December 14, 2015, the New Zealand General Manager for Xero was Victoria Crone, who resigned to pursue the Auckland Mayoralty in 2016.[22]

On December 21, 2015, Xero announced Anna Curzon, a former General Manager of Digital Technology at Spark and GM of internet banking at ASB Bank, as the new general manager for Xero in New Zealand.[23]

United States

Chris Liddell, the New Zealand born and New York City based former CFO for Microsoft and General Motors, was announced as new Chairman of Xero's board of directors on 24 February 2014.[24]

Peter Karpas, a former PayPal Vice President, was appointed CEO of Xero North America effective 24 February 2014.[25] However, he stood down after 6 months in this role as it was mutually agreed he wasn't suited for the role.[26]

On 24 February 2015 Russell Fujioka, a former marketing executive with Adobe Systems and Dell, was named Xero's North American President.[27]

Product

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.[28] 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.[29] Xero also supports multiple tax rates and currencies.[30]

It also incorporates a payroll feature for users in the Australian and United States markets.[31][32] Additionally, users can access local teams in New Zealand, Australia, Europe and the United States.[33]

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.[34] 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.[35] In 2011, Xero released the Xero Touch mobile apps for iOS and Android devices,[36] allowing users to issue invoices while on-site with clients.[37]

Awards and recognition

In 2007 Xero received the Overall Partner Solution of the Year for Small Business and also featured as part of a Microsoft case study.[38] The company was the recipient of two Webby Awards in 2009, including the People's Choice Award for Banking/Bill Pay.[39][40] It was recognized again with a Webby in 2010 for Web Services & Applications.[41] It received a Fast Company Innovation by Design Award in 2012[42] and was recognized as one of the 10 Smart Financial Apps to Solve Small Business Accounting Challenges by YFS Magazine in 2013.[43] Additional awards in 2013 included the Awesome Application Award from the Sleeter Group[44] and the New Zealand Company of the Year from Hi-Tech.[45] In June 2014, Xero topped the Forbes magazine "100 most innovative growth companies" list.[46] Also in 2014, the company was named one of Macworld's recommended online business accounting apps.[47] In January 2015, Xero has been crowned best accounting software in the Cloudswave Awards with a score of 83.[48]

Major competitors

The biggest accounting competitor in the US was QuickBooks, which held up to 90% of the market of small businesses that already use an accounting application[citation needed]. In its home market of New Zealand its main competitor was Australian based MYOB.

There are several other SaaS accounting apps in the market that have been developed since 2010 and many of the traditional accounting software companies have responded by launching SaaS versions of their software.

See also

References

  1. ^ a b c Barwick, Harrish (8 November 2012). "NZ-based SaaS provider Xero lists on ASX". Computer World. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  2. ^ a b Laugesen, Ruth (17 October 2013). "From Xero a hero". New Zealand Listener (subscription required). Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  3. ^ a b c "Xero Operating Update" (PDF). Retrieved 3 May 2014.
  4. ^ 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. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  5. ^ Campbell, Anita (13 October 2013). "Small Biz Accounting Software Space Heats Up As Xero Raises $150 Million". Small Biz Trends. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  6. ^ a b Niesche, Christopher (6 June 2007). "Xero begins strongly". New Zealand Herald. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  7. ^ Robins, Brian (6 November 2013). "Sharemarket darling Xero dubbed 'Apple of accounting'". The Sydney Morning Herald. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  8. ^ Calvey, Mark (10 October 2013). "New Zealand accounting software company expanding to Denver". Denver Biz Journal. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  9. ^ Wallace, Aaron (29 August 2012). "MYOB vs Xero: The accountancy software joust". Smart Company. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  10. ^ Fletcher, Nick (25 September 2013). "Sage slips on competition concerns as rival Xero targets UK". The Guardian. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  11. ^ Thomas, Myra (17 October 2013). "Accounting Software Maker Xero Hiring in S.F." Dice. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  12. ^ Smith, Robert (7 April 2009). "MYOB founder helps Xero raise $23m for global push". National Business Review. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  13. ^ Wauters, Robin (22 October 2010). "Peter Thiel Invests $3 Million In Xero To Support Its US Expansion". Tech Crunch. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  14. ^ Wauters, Robin (3 February 2012). "Small business accounting service Xero raises $16.6M". Venture Beat. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  15. ^ 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. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  16. ^ 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. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  17. ^ Rogers, Claire. "Xero buys payroll firm to boost Aust growth". Stuff.co.nz. Retrieved 19 September 2013.
  18. ^ "Xero's latest acquisition a 'compelling' one for accountants". Idealog. Retrieved 19 September 2013.
  19. ^ Kepes, Ben (1 February 2012). "Xero Raises Another Round and Acquires WorkFlowMax". Diversity Limited. Retrieved 17 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  20. ^ Hammond, Michelle. "Xero acquires Max Solutions after raising $15m". Startup Smart. Retrieved 19 September 2013.
  21. ^ "US interest in Xero fades". Businessday. Fairfax Media. 23 July 2014.
  22. ^ "Crone declares mayoral bid". Stuff. Retrieved 2015-12-31.
  23. ^ "Xero announces new managing director". Stuff. Retrieved 2015-12-31.
  24. ^ Clark, Don (2014-02-11). "Xero Steps Up U.S. Attack With Chris Liddell as Chairman". WSJ Blogs - Digits. Retrieved 2015-12-31.
  25. ^ "Xero appoints Board Chairman, Director, and CEO for North America - Xero Blog". Xero Blog. Retrieved 2015-12-31.
  26. ^ "Xero shares drop as US boss Peter Karpas quits". The National Business Review. Retrieved 2015-12-31.
  27. ^ "Xero raises $147m from US investors". New Zealand Herald. 2015-02-25. ISSN 1170-0777. Retrieved 2015-12-31.
  28. ^ Lam, Greg (2 July 2013). "Cloud Accounting Comparison – Data Import and Export". Sleeter. Retrieved 16 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  29. ^ 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.
  30. ^ Lam, Greg. "Xero Review". The Small Biz Doer. Retrieved 19 September 2013.
  31. ^ "Will Xero's New Payroll Features Make Cloud Bookkeeping Even Easier". First Business Partners. 3 January 2014. Retrieved 16 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  32. ^ Hessinger, Shawn (9 December 2013). "Xero Introduces New Payroll Servie". Small Biz Trends. Retrieved 16 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  33. ^ Smith, Heather (23 May 2013). Xero For Dummies. John Wiley & Sons. p. 41. ISBN 978-1-118-57252-8.
  34. ^ Gorham, Tom. "Xero review". PC Pro. Retrieved 16 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  35. ^ LaBarre, Suzanne (25 February 2012). "Xero Reinvents Accounting For Small Businesses, With Superb UI Design". Fast Code Design. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  36. ^ Fineberg, Seth. "Xero Debuts Mobile App for Android". Accounting Today. Retrieved 9 September 2013.
  37. ^ Smith, Heather (23 May 2013). Xero For Dummies. John Wiley & Sons. p. 35. ISBN 978-1-118-57252-8.
  38. ^ "Software Developer Improves Service Levels With Superior Database Technology, Flexible Licenses". Microsoft Corporation. 10 September 2007. Retrieved 16 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  39. ^ Hall, Mitchell (6 May 2009). "Hyperfactory and Xero big winners at 'online oscars'". The National Business Review. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  40. ^ McBeth, Paul (22 October 2010). "PayPal founder pumps $4 million into Xero". Scoop. New Zealand. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  41. ^ "2010 – 14th Annual Webby Awards – Award List". The Webby Awards. 2010. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  42. ^ LaBarre, Suzanne. "2012 Innovation By Design Awards: Service Design". Fast Company. Retrieved 17 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  43. ^ "10 Smart Financial Apps to Solve Small Business Accounting Challenges". 4 January 2013. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  44. ^ "Awesome Application Award Winners 2013". Retrieved 17 January 2014. {{cite web}}: Cite has empty unknown parameter: |coauthors= (help)
  45. ^ "Xero and Vend big winners at NZ Hi-Tech Awards 2013". National Business Review. 18 May 2013. Retrieved 15 January 2014. {{cite news}}: Cite has empty unknown parameter: |coauthors= (help)
  46. ^ "Most Innovative Growth Companies". Forbes, June 2014
  47. ^ "Top Choice: Our favorite online-based business accounting apps".
  48. ^ "The 10 Best Accounting Software 2015 According to Cloudswave". Cloudswave Blog. Retrieved 2015-10-26.
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