XRO
30/11/2012 11:40
PLACE
REL: 1140 HRS Xero Limited
PLACE: XRO: Xero raises NZ$60m from US investors
MARKET RELEASE
Xero raises NZ$60m from US investors
30 November 2012
Xero Limited (XRO) has raised NZ$60 million of new capital from Valar
Ventures (backed by Peter Thiel) and Matrix Capital Management. Matrix
Capital Management is investing NZ$58 million and Valar Ventures NZ$24
million. Their total investment of NZ$82 million includes a purchase of NZ$22
million of shares from Xero's three largest shareholders.
All the transactions are priced at the 20-day volume-weighted average price
at the time the deal was negotiated - NZ$6.00 per share.
The Board's decision to increase funding follows the announcement on 14
November 2012 that Xero will accelerate its investment in the business to
take advantage of market conditions. Xero recently reported Annualised
Monthly Committed Revenue of NZ$38.7 million as at 30 September 2012, up from
NZ$18 million a year earlier. The company expects to double its operating
revenue for the full year to 31 March 2013. Xero reported NZ$30.6 million of
cash on hand and a first half loss to 30 September 2012 of NZ$7.0 million.
Xero anticipated an increased loss for the second half to 31 March 2013.
"Over the past two years of our involvement with Xero, we have seen the team
consistently meet and exceed their ambitious goals," says Andrew McCormack of
Valar Ventures. "The combination of an experienced and focused team,
superlative product, good timing and an absolutely huge market give us
confidence that Xero has a very long runway."
David E. Goel, Managing Member of Matrix Capital Management, says "we have
witnessed the disruptive power of cloud computing across the technology
universe, and believe Xero is the global market leader in cloud-based small
business accounting software. Xero differentiates itself, not only as a model
for accountancy, but also as a harbinger for where all software companies
will have to go if they want to remain relevant. The future is in the cloud,
Xero is already there, and we want to be there."
The investors made the offer to buy shares from the three largest Xero
shareholders in order to minimise dilution to existing shareholders. As a
result of the new share issue and transactions, Matrix Capital Management's
shareholding will increase from 1.8% to 9.8% and Valar Ventures will increase
from 3.9% to 7.0%. Director Craig Winkler's shareholding will reduce from
19.5% to 15.7%, Chief Executive Rod Drury's shareholding will reduce from
21.0% to 18.5% and c0-founder Hamish Edward's shareholding will reduce from
5.7% to 4.9%.
Xero Chief Executive Rod Drury says, "We are delighted that sophisticated
global investors have been watching our progress and wish to support our
continued investment in growth.
We look ?????????forward to winning market share from the big incumbents by
introducing small businesses around the world to beautiful accounting
software."
ENDS
For more information contact:
Rod Drury
Xero Chief Executive [email protected] +64 27 6000 007
Ross Jenkins
Xero CFO [email protected] +64 21 963 909
About Xero
Xero provides beautiful, easy to use online accounting software for small
businesses and their advisors. The company has over 100,000 paying customers
and 200,000 users in more than 100 countries around the world. The company is
listed on the NZX and ASX.
See http://xero.com
About Valar Ventures
Valar Ventures is a global venture capital firm backed by Peter Thiel. Based
in San Francisco, Valar invests exclusively in companies outside of the
United States. Valar believes that over the next decade an increasing number
of transformative technology companies will be started outside of the US, and
that the founders of those companies will benefit from having a US partner
that understands their unique challenges and opportunities and can help them
access US networks.
See http://www.valarventures.com/
About Matrix Capital Management
Matrix Capital Management is an investment advisor registered with the United
States Securities and Exchange Commission and is based in Waltham,
Massachusetts, just outside of Boston. Founded in 1999 by David E. Goel and
Paul J. Ferri, the fund primarily invests in publicly traded equity
securities with a focus on developing a deep and detailed "bottom-up"
analysis of each company in its portfolio. Under Mr. Goel's stewardship as
the Managing Member, Matrix takes the long view of investing. This strategy
involves developing high conviction in companies based on its particularised
research into their fundamentals, and combining that knowledge with a
di?fferentiated understanding of the sectors in which they do business. Over
its fourteen-year investment history, Matrix has specialised in companies
that use technology to disrupt or disintermediate business models, while
cultivating specialised experience in the technology, media/telecom and
consumer sectors.
Within the technology sector, Matrix has been extensively involved in several
sub-segments: software-as-a-service, cloud infrastructure, payments,
e-commerce, social media, mobile data, and streaming video. Over the last two
decades, the Matrix investment team has built relationships with executives
and entrepreneurs in these areas who help Matrix identify and evaluate
potential investment opportunities. Matrix's strategy is to invest in a
concentrated portfolio of attractively- valued companies whose innovative
ideas, strong fundamentals, and visionary management teams position them to
grow over multiple years. Matrix invests a significant amount of time and
resources in developing high conviction in each of its positions, holding to
a deliberate strategy designed to generate strong, durable returns over time.
This above information about Matrix Capital Management does not constitute an
o ffer to sell or solicitation of an offer to buy any securities.
End CA:00230501 For:XRO Type:PLACE Time:2012-11-30 11:40:45
