HE WALKED away from his first accounting software start-up, MYOB, a couple of years ago with more than $120 million in his pocket.
Now, Craig Winkler is well on the way to doubling his money, this time not from his day job, which is in the non-profit sector, but from a start-up that is out to eat into his old firm's business.
In 2009, Winkler invested $NZ17.5 million in the accounting software start-up Xero, based in New Zealand, which he topped up to a $NZ21.55 million stake earlier this year.
Xero founder Craig Winkler. Photo: James Davies That outlay is now worth more than $NZ115 million ($90.1 million), as he rides the wave of disruptive technology that is rewriting the rules of commerce - not just in old line industries such as retailing and the media, but in fields such as software as well.
Xero - which is yet to make money - already boasts a sharemarket worth approaching $500 million, putting it comfortably ahead of the locally listed accounting software company Reckon, which is valued about $300 million.
From a solid New Zealand base, Xero is now pushing hard into the Australian market, with an internet offering of its software that has stolen a march on MYOB and Reckon, which have been around for much longer.
Both have followed suit, but with a six-year head start, catching up with Xero will not be quick, or easy.
And as an online offering, this gives Xero a significant cost - and price - advantage over its rivals, which are now faced with imploding margins.
This week, Xero listed on the Australian Stock Exchange, as part of a plan to lift its profile in Australia.
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Its quick revenue growth has left it with about $NZ30 million of cash in hand.
''Listing in Australia is to boost the Australian profile,'' Drury says. ''Being on the ASX gives us that option'' of raising funds in the future.''
Stockbrokers and investors have expressed interest in the company's progress, giving it some funding flexibility down the road. However, its appetite for funds will depend both on how fast it can increase revenues and on the number and size of any acquisitions it makes.
''We are planning a number of small acquisitions around our 'eco-system','' Drury says.
Winkler adds: ''For us, the plan is to grow the business aggressively and go for it while we have the opportunity.
''The size of the Australian market means that it will soon emerge as the largest single market for Xero, as it continues to gather strength to make inroads into the US market, where it is already trying to rev up its presence.
''Just in terms of market size, the US is likely to be enduring in its growth,'' Winkler says, which could demand more funds in future.
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