Going public the best way, says Drury

Rod Drury says every business person should aspire to take a company public once in their lives. Photo / Mark Mitchell

Serial entrepreneur Rod Drury has proven he can start, run and sell a successful company.

Hailing from Hawkes Bay, in 1995 he co-founded the software firm Glazier Systems, which sold four years later for $7.5 million.

Drury's next project, AfterMail, was bought by California-based Quest Software for an amount thought to be as high as US$65 million ($85 million).

But with his latest venture, online-accounting firm Xero, Drury has taken a new approach - he floated the company on the NZX, almost from day one.

"We realised that if we had a traditional funding round we'd get bought out by the big guys and having sold a couple of businesses before, the core team really wanted to build a long-term business from New Zealand not just take it up to a point where it sells," he said.

Although the company was still $7.5 million in the red for the 12 months to March 31, Xero tripled its annual revenue in the 2010/11 year to $9.3 million.

Drury said the company also hit a number of milestones last month, gaining 50,000 customers and processing more than $50 billion of customer transactions since launching in 2006. Although listing has its challenges and puts a company firmly in the public eye, Drury is calling on other start-ups to follow Xero on to the NZX.

"We hope there are other companies that list and take a long-term view. You have to really want to, because normally starting a small business is so hard, by the time you get the big cheque you're kind of happy just to go jump on a beach," he said.

Drury said going public is a way of drawing export dollars back into the local economy and ensuring intellectual property stays in New Zealand.

"It should be the aspiration of every New Zealand business person to take a company public at one point of their lives.

"If we want to create better schools and hospitals we have to create vehicles to make money [for New Zealand]," he said.