XRO
A brief background and sources for more information on Xero.
An example of new equity listing.
Short finance history:
- Company created 6-Jul-06 as Accounting 2.0 Limited with the name changed twice since (see Company Office details). Equity of $2,781,038 was raised in the initial 2006/07 March year, being $2,800,000 less $19,000 issue costs (IPO offer document (pdf))
- All shareholders were issued with 22.2 extra shares per share held prior to listing. At this stage interests of Rod Drury owned 62% of the company and interests of Sam Morgan owned 2%. The average price paid across all shareholders was 7c per share after the subdivision (although the actual price paid by the 10 or so shareholders may differ).
- 15 million shares in an IPO were fully subscribed by 1-Jun-07, raising $15m (less $1,111,000 issue costs). The cost of the IPO/listing were 7.4% of the sum raised. Rod Drury neither bought nor sold shares in this IPO but Sam Morgan’s shareholding did increase by 25% during this time.
- Floated on NZX 5-Jun-07 with closing price first day $1.10 i.e. up 10% on issue price (Sharechat)
- Shares were issued in April/May 2009 at 90c (being slightly above the market average price prior), raising a further $29.3m. $23.4m was raised in a private placement including $17.55m from a company linked to Craig Winkler and $1m from interests of Sam Morgan. $5.85m was raised via a public issue to existing shareholders. The cost of raising these funds was 3.4% of the sum raised.
- Xero shares have also sold to employees (and funded with loans to staff) for $0.84m, with 460,000 of these shares issued new and 500,000 bought on the open market at an average price of $1.49 in August 2009.
- Between the creation of the company in 2006 and the March 2010 balance date the company has raised equity of $46.9m at a cost of 4.5%, has lost $19.3m and has tangible assets of $23.7m.
- Share price $1.45 as at 18-Jun-10.
- Next stage: San Francisco-based investor Peter Thiel invests $4m in company via issue of new shares at $1.4918 each. Thiel was a co-founder of PayPal and is a board member of Facebook.
- Share price $2.23 as at 10-Dec-10. (see latest: NZX, Findata, Google, Yahoo)
Sources: Xero, Companies Office, NZX Deep Archive, smallcaps.co.nz, Wikipedia
Key People:
- Rod Drury is CEO and founder of NZX-listed Xero, an online accounting solution for small businesses. One of New Zealands leading technology entrepreneurs, Rod is a member of the New Zealand Hi-Tech Hall of Fame, NZ Hi-Tech Entrepreneur of the Year in 2006 and 2007, World Class New Zealander for ICT in 2008, an Honorary Fellow of the NZ Computer Society and is a member of Victoria University of Wellington Facility of Commerce Advisory Board. Rod was a Director of TradeMe when it was sold to Fairfax Media for $750m.see NZX Director details.
- Craig Winkler co-founded Australian small business accounting software provider MYOB – Xero’s biggest competitor in Australasia – in 1991. Craig went on to build up a team around him that made MYOB a popular business tool and brand in Asia, New Zealand, the US, the UK and Ireland. In 2004, MYOB merged with Solution 6 to become Australia’s largest IT company with more than 1,000 staff globally. Craig resigned as Director and Chief Innovation Executive at MYOB in 2008. Craig joined the Xero Board of Directors in May 2009.
- Hamish Edwards is a co-founder of Xero who oversees growth in existing regions and our expansion into new markets. Formerly Hamish established Xero in the UK where he was responsible for banking relationships, partnerships and the accounting industry. Hamish is a Chartered Accountant and before Xero he was the CEO of one of New Zealand’s fastest growing chartered accounting and consulting firms, Openside. As the chairman of Openside Hamish continues to help fast growth technology businesses with business development, funding and new market entry assistance. Hamish is a small business expert and has been featured in or written for Real FD, Accountancy Age, Accounting Web, the Fairfax Group, the National Business Review, M2 Magazine and various other publications.
Excel file of equity raising: XROhistory
