New Zealand-based, but globally ambitious cloud accounting software vendor Xero is today announcing more than $110 million funding from Accel Partners and Matrix Capital Management. At the same time Xero is announcing that former Dell executive, Russ Fujioka, is joining the company as US President.
Both these announcements are important for the company – financial analysts have long pointed to Xero’s high burn rate and suggested that a capital raise would be required soon.
US Venture capital firms Accel Partners and Matrix Capital Management are behind the investment. Accel, a leading Silicon Valley venture capital firm agreed to invest NZ$132.9 million, while former Xero investor Matrix will invest NZ$14.3 million.
Accel Partners is known for its continued investment in early stage startups, with early investments Facebook, Spotify and Dropbox and the company invested US$60 million in Australia’s startup darling Atlassian.
In October, the firm invested US$35 million into InVoice2Go, an Australian invoicing app started by Chris Strode, from the Victorian country town of Wodonga. So it looks like the small business accounting space is where Accel believes the big bucks are.
Xero founded in 2006 by Rod Drury, is cloud-based accounting software for entrepreneurs. It allows users to create invoices, pay bills and wages reconcile bank accounts and a number of other functions required to run a small business. This cloud model allows for access from everywhere, on multiple devices and with multiple staff collaborating. Competitors such as traditional accounting software company MYOB have also opened a cloud-based system as an option.
Since its inception in Wellington, New Zealand, the company has expanded rapidly with offices in Australia, the UK and the U.S. While the software has 400,000 users in more than 180 countries around the world.
The new funding round, taking the company to a cash balance of NZ$285 million, will allow the company to continue innovating and growing globally.
Meanwhile, Xero said appointing Russel Fujioka as USA president would enable the continuing the expansion of its US and Global teams. He will be based at Xero’s San Francisco headquarters”Fujioka brings to Xero significant experience in sales, digital marketing and operational management of high growth technology businesses,” the firm said.
The company has also appointed Graham Smith to its board as an independent, non-executive director. “Smith brings significant experience scaling SaaS businesses and creating industry leaders from his time as Salesforce’s chief financial officer and as a Board member of industry leaders such as Splunk,” Xero said.