Respected director Rob Cameron remembers the day Rod Drury wandered into his investment banking firm Cameron Partners in 2007 to talk to him about his initial listing plans and business ideology.

Normally, companies that list on the NZX have achieved momentum through initial private investment and establishing a track record of profitability.

"Rod had neither of them," says Cameron. "We knew of Rod before he came to see us. We had checked him out and found this guy is serious and worth listening to.

"He had this accounting software, and he envisaged a market that he would sell into. He wanted to scale quickly and become a global company. He had boldness and courage by arguing that Xero had to list to get the capital he needed to increase its profile.


"Rod was very imaginative and he had this amazing self-awareness that he would have to lead people rather than do it himself," says Cameron.

"Entrepreneurs don't often scale well. Rod recognised that he needed a strong board with the right capabilities to mentor and guide the growth."

Cameron Partners linked up with First NZ Capital to manage the then start-up Xero's initital public offering (IPO). "It was quite risky. We made sure he had a good compelling business plan and this got us over the line," says Cameron.

"Rod has been extraordinarily visionary. He went for scale and not short-term profitability. He took accounting, which you would have thought was boring, and turned it into a software as a service business. He had the vision to build an ecosystem around it and people were building apps to support it.

"Rod showed size doesn't matter and that New Zealand entrepreneurs can build global companies from scratch. In New Zealand we are a conservative bunch and we never had a market in these high-tech stocks. Now we love to invest in growth stocks. It's now part of the lexicon that has arisen and Rod started that."

Cameron's faith was not misplaced.

By 2014, Xero was awarded No 1 ranking in the Forbes' list of the World's Top 100 Most Innovative Growth Companies; an honour it repeated in 2015.

It was also named the best accounting software in the Cloudswave Awards in January, 2015.


The judges have now named Drury the Visionary Leader for 2017 in the Deloitte Top 200 awards, in recognition of his impressive achievement to build a global company from scratch to reach $4.7 billion market capitalisation in just a decade.

The Deloitte Top 200 judges say Drury has demonstrated temendous vision and achieved a real impact.

"Xero has truly delivered on its vision to disrupt the accounting world for the better — accountants now perform in the more trusted business advisory role.

"He has built a meaningful footprint offshore in a way that is it very hard for New Zealand companies to do," the judges say.

Drury already had a successful career behind him as an entrepreneur when he launched Xero.

In 1995, he established Glazier Systems, a NZ software development and consulting company that was eventually sold to Advantage Group in 1999 for almost $7.5 million (it continues now as Intergen). He subsequently founded Aftermail which was acquired by Quest Software for US$15m in 2006.

But when he founded Xero, he drew on his early career as an accountant.

Right from the start Drury was determined to develop a global technology company and sacrifice short-term profitability — he succeeded with his "beautiful" Xero online accounting software.

Drury can safely be described as a people-manager.

Although he listed his accounting software company on the NZX 10 years ago and proclaimed straight away that Xero was going global, Drury would not have achieved that target without the strong support of his staff, who gladly joined him on his exciting journey.

Anna Curzon, Xero's Chief Partner Officer, says Drury is one of the most human people she's met. As a leader he's orientated to servant leadership.

"One of the first things he said to me when I started was how important it was to have channels so everyone can communicate. As Rod said, 'the 21-year-old newly arrived at Xero may have the next best idea'.

"We all have skin in the game," says Curzon. "There's no big steering committee. Everyone has a sense of ownership and you are as valued as anyone else in the organisation.

"You don't look to people in the hierarchy to make the decisions. You make them happen and drive the company forward. Rod really does walk the floor. He's dropping ideas and opportunities with people and it's really beautiful seeing them threaded together.

"Rod is very curious," adds Curzon. "He wants to understand people's positions and why they think like that. He doesn't have all the answers and he's willing to learn from others and be challenged. He will thank them for the opportunity to have a debate. He may change his position on the information at hand, but he won't always agree."

Drury, the servant-leader, shares power, puts the needs of others first and helps his staff develop and perform as highly as possible. He is also open and transparent.

Soon after Curzon began her new role in February 2016, she attended her first fortnightly Global All Hands staff meeting, streamed through Google Hangouts.

Says Curson, "People are beaming in from all around the world. We worked through strategy and Rod wanted to get everyone's thoughts. We were going through some key strategic pillars and it was quite detailed. I thought 'gee, it really is this open'.

"We then had product demos from Wellington and San Francisco. Rod then announced 'we've already got feedback on the strategic pillars, let's continue this conversation'.

People challenged his thinking and he shared intimate details of the strategy. He wanted to flesh it out, and getting feedback from everyone was more important than from a few of the staff. Rod is a very open and trusting leader."

Xero, the cloud-based accounting software leader, listed on the New Zealand Stock Exchange in June 2007 with an initial public offering of $15 million and 100 customers.

Drury wanted to list on the NZX rather than receive investment from Silicon Valley so he wouldn't be pressured into selling to a larger competing company.

After listing at $1, Xero's share price soared to a peak of $44.79 on March 7, 2014. It is currently sitting around $33 — a rise of 80 per cent in the past 12 months.

Xero listed on the Australian Securities Exchange (ASX) in November 2012 after entering the Australian and British markets in 2008 and the United States in 2011.

Over the years Xero has raised more than $350m in funding from a group of leading US technology investors, and has quickly built a global software as a service (SaaS) company, servicing many thousands of small and medium-sized businesses.

For the financial year ending March 31, 2017, Xero reached operating revenue of $295.4m, compared with $66.8m three years earlier.

By September 30 this year, its six month revenue was up 37 per cent to $187.8m compared with the corresponding period last year. About 80 per cent of its revenue comes from overseas.

Xero is closing in fast on net profitability. Its net loss for the latest six months was $21.1m, down from $43.9m in the previous corresponding period — and on the back of a $69m loss for the 2016/17 financial year.

Over the past 12 months Xero added 337,000 paying subscribers to reach 1.2 million customers, and its "beautiful" accounting system was used in 180 countries.

The bulk of the customers are based in Xero's four key markets — 518,000 in Australia, 271,000 in New Zealand, 253,000 in Britain (an increase of 54 per cent over the past year) and 110,000 in North America.

Xero has established a regional headquarters in Singapore for a push into the Asian markets, and it now employs 1800 people in 20 offices around the world — but 1000 of the staff are based in New Zealand in offices in Wellington, Auckland and Napier, or working remotely in other parts of the country.

Xero is a busy bee. It is always updating its product — 1500 updates in the past financial year — to keep ahead of its global competitors.

It has established an application programme interface (API) to enable customers and third-party software vendors to integrate external application with Xero. More than 275 third-party vendors have built Xero add-ons.

All the financial data is stored in the cloud on a single unified ledger, allowing users to work in the same set of books regardless of location or operating system.

Xero has partnered with Amazon Web Services (AWS) to explore new products using Artificial Intelligence and Machine Learning, and has emerged from a back office product to providing front office solutions.

Curzon says that three years ago Xero decided it needed to move to a new platform and with AWS it was able to future-proof its business.

"With Machine Learning and Artificial Intelligence capability, we continue to innovate and get better insights and help other businesses to thrive. We have a three-year start on other competitors by moving on to a new platform."

Xero has built a total small business system to make accountants, book-keepers and small and medium-sized companies more efficient, more productive and more profitable, enabling them to grow and create new jobs.

World Bank statistics show that over the next 15 years, 600 million new jobs will need to be created, and four out of the five jobs will come from small businesses.

Xero is well placed. "There's no better time to support the small business," says Curzon.

Drury's recent moves have stoked debate in New Zealand investing circles.

His announcement that Xero would delist from the NZX on February 2 next year and consolidate the two listings on the ASX, has provoked some soul-searching at the NZX.

Drury said delisting from the NZX was "the next stage of Xero's strategy to ensure we can attract strategic global growth investors who own significant stakes in other global platforms that we now consider peers, and who are under-represented on our share register currently."

Ten days ago, Drury sold down his stake in the company, netting himself $94.5m and in turn boosting the liquidity in Xero shares.

He says some of the funds are earmarked for future philanthropic endeavours, which his family will run for now.

Drury remains the largest shareholder in Xero with a 12.8 per cent stake estimated to be worth $600m, and will continue as chief executive.

Along with TradeMe, Xero is seen as an integral part of the innovative ecosystem in Wellington, where both companies remain headquartered.

Says Drury, "I'm as passionate about Xero today as the day we founded the business and I'm proud of what we have achieved as a company, evidenced by our strong recent financial results.

"We have a lot more to do in order to realise our global growth aspirations, and I remain fully committed to Xero and building our global business from New Zealand."

Rod Drury's achievements:

• New Zealand Hi-Tech Entrepreneur of the Year in 2006 and 2007
• World Class New Zealander for ICT in 2008
• Distinguished Alumni Award, 2011 Victoria University of Wellington
• NZ Herald Business Leader of the Year in 2012
• EY New Zealand Entrepreneur of the Year in 2013
• The Wellys-Wellingtonian of the Year — Business category winner in 2014
• Named one of The Top People in Public Accounting by Accounting Today in 2016
• Global Marketer of the Year 2017, named by The Academy of Marketing Science
• Member of the NZ Hi-Tech Hall of Fame and Honorary Fellow of the Institute of IT Professionals NZ
• Works with Creative HQ, an innovation base in Wellington, involved with community business advisory in Hawke's Bay
• A member of the ASB Strategic Insights panel in partnership with KPMG and has lobbied for the creation of a national chief technology officer role
• Formerly a director of NZX and TradeMe, and consultant with EY
• BCA in Accounting and Information Systems from Victoria University