Xero shares halted pending capital raising

Xero chief executive and founder Rod Drury. Photo / Mark Mitchell

Shares in cloud-based accounting software developer Xero have been halted pending the outcome of a capital raising.

The Wellington-based company sought the halt for up to 48 hours "pending release of a material announcement by Xero Limited in relation to the outcome of the capital raise," it said in a statement to the ASX.

Xero expects to make a more detailed announcement on Monday, it said in a separate statement.

The shares slipped 0.3 per cent to $17.95 on the NZX before the halt, having more than doubled this year.

The company last raised money in November last year when Peter Thiel's Valar Ventures and Massachusetts-based Matrix Capital Management injected $60 million of new capital, while buying $22 million of shares from director Craig Winkler, chief executive Rod Drury, and co-founder Hamish Edwards at the same time.

Xero has been burning through funds as it posts short-term losses as part of a strategy to build a one million-strong customer base, holding cash on hand of $55 million as at September 30. By the end of last month it reached 211,000 customers with annualised revenue of $70.6 million.