Ann: GENERAL: XRO: XRO Attracts World-Class Investment + Talent To Fuel Growth

• Release Date: 25/02/15 09:26
• Summary: GENERAL: XRO: XRO Attracts World-Class Investment + Talent To Fuel Growth
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					XRO
25/02/2015 09:26
GENERAL
PRICE SENSITIVE
REL: 0926 HRS Xero Limited

GENERAL: XRO: XRO Attracts World-Class Investment + Talent To Fuel Growth

XERO LIMITED (XRO)

25 February 2015
(Note: NZ$ means New Zealand dollars; and US$ means U.S dollars; figures are
rounded to 1 d.p.)

XERO ATTRACTS WORLD-CLASS INVESTMENT AND TALENT TO FUEL GROWTH
- Raises $NZ147.2m (US$110.8m) from Accel Partners and Matrix Capital
Management
- Appoints Former Dell Executive, Russ Fujioka, as U.S. President
- Graham Smith, SaaS leader and former Salesforce CFO, joins Board

Xero Limited (XRO) today announces that Accel Partners has agreed to invest
NZ$132.9 million (US$100 million) at NZ$20 (US$15.052) per share through a
number of funds (the Accel Funds) under its management. Current shareholder
Matrix Capital Management, Xero's largest institutional investor, has agreed
to invest an additional NZ$14.3m (US$10.8m). Accel Partners is a leading
Silicon Valley venture capital firm focusing on early stage and growth stage
investments. Upon completion of the transaction, Xero will have a cash
balance of approximately NZ$285 million.

Xero will use the proceeds from the issue of the shares to fuel continued
innovation and growth globally and specifically to drive its growth in the
United States and United Kingdom.

Xero continues the expansion of its U.S. and Global leadership teams,
appointing Russell Fujioka (53) as U.S. President, effective immediately,
based at Xero's U.S. headquarters in San Francisco. Fujioka brings to Xero
significant experience in sales, digital marketing and operational management
of high growth technology businesses.

Graham Smith (55) has today joined the Xero Board as an additional
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.

Comments on the news:

- "We welcome the Accel Funds as strategic investors in Xero, and are
delighted with Matrix's continued support," said Xero CEO, Rod Drury. 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."
- "Accel always looks for enduring technologies with global reach and we see
the need and opportunity for millions of small businesses to grow on Xero's
platform," said Andrew Braccia, partner at Accel. "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."

Details of the Equity Investment

The investment by Accel Partners is expected to close in mid-March 2015,
provided that the conditions set out in the subscription agreement dated 25
February 2015 are met. These conditions include that there has been no event
that causes, or is reasonably expected to cause, a material adverse effect on
Xero and that the warranties (being warranties which are usual for a
transaction of this nature) by Xero in the subscription agreement are
materially true and correct on closing.

The investment by Matrix Capital Management is also expected to close in
mid-March 2015, and is not subject to any conditions other than the closing
of the Accel Funds investment described in this release. The newly issued
shares to be issued to the Accel Funds and to Matrix Capital Management will
be restricted from sale for a period of ninety days from the date of issue.

The Accel Funds will receive participation rights that will generally allow
them to participate in future placements to a percentage equal to their total
stake in Xero (expected to be around 4.9% in aggregate on closing of the
transaction). Matrix Capital Management already holds such rights.

-ENDS-

For more information contact:
Rod Drury
Xero CEO
+64 27 6000 007
[email protected]
Alice Chan
Xero PR
+1 (415) 740 8174
[email protected]

About Xero
Xero is beautiful, easy to use online accounting software for small
businesses and their advisors. The Company has over 400,000 paying customers
in more than 180 countries around the world and over 1,100 employees. Xero is
listed on the NZX and ASX. See www.xero.com
End CA:00261115 For:XRO    Type:GENERAL    Time:2015-02-25 09:26:20