Matrix, Valara invest $150m in New Zealand's Xero

Matrix and Valara - which is backed by Peter Thiel, an early investor in PayPal and Facebook - previously committed NZ$60 million to the company in November last year. Prior to that, Valar had also been an early investor in 2010 committing NZ$4 million to the company, followed by another NZ$16.6 million in February, 2012.

This latest round brings to the total amount raised by the company to $230 million.

Xero, which trades on the Australian and New Zealand bourses, was founded is 2006. Its chief product is a software-as-a-service (SaaS) accounting program that is accessible from the internet cloud via a standard browser.

According to a release, this new injection of capital will continue to fund the company's rapid US expansion - having first entered the market in 2011 - allowing the business to take on market rivals such as Inuit's QuickBooks.

Xero has offices in the US, UK, Australia and New Zealand and is valued at around $2 billion. It expects operating revenue to exceed NZ$30.3 million for the six months ended September 30, up 84% year-on-year. However the company is yet to be profitable, reporting a net loss of NZ$14.4 million for the last fiscal year.

"Capturing the power and affordability of cloud-based computing, Xero has democratized accounting, payroll, and other business software that was once the privilege of only the largest companies," said David Goel, managing member of Matrix capital management, in a statement.

"Having empowered hundreds of thousands of small and medium-sized businesses in New Zealand, Australia, and the United Kingdom, Xero is poised to do the same for its 29 million potential customers in the United States."

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• Topics
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