Rod Drury's Xero is going from strength to strength, and now has 6000 subscribed users. Photo / Mark Mitchell
Online accounting software company Xero raised $23.2 million, with the company saying the money came from strategic investors who could add value to its growth strategies.
Craig Winkler, a founder and former major shareholder of Australian - based accounting software company MYOB, had subscribed for $18m of the new Xero
shares in the fundraising, subject to Xero shareholder approval, Xero said today.
Xero chief executive Rod Drury said Mr Winkler's investment was a strong endorsement of the Xero business model, its market and growth opportunities.
"Craig Winkler is very experienced in the market for the provision of accounting software and services to small businesses, having founded and built a large and successful international business in that segment," Mr Drury said.
The $18m of new shares for Mr Winkler included $450,000 from parties associated with him.
The Bank of New Zealand, an existing Xero shareholder, had subscribed for $1.6m of shares, while Xero independent directors Sam Morgan and Graham Shaw had subscribed for a total of $1.45m.
Other investors, including an institutional investor, had subscribed for the remaining $2.15m of new Xero shares.
The investors paid 90c per share, a premium of about 4.7 per cent to the volume weighted average share price of 86c per share over the five trading days before Xero's announcement on April 2 of a potential capital raising.
Xero's share price was up 1c to $1.15 at lunchtime today, its highest price since June 2007, the month it listed on the stock exchange at $1 per share.
Along with the capital raised from strategic investors, Xero intends to offer a share purchase plan to existing shareholders of Xero at 90c per share.
A week ago, Xero announced it had passed the 6000 customer number milestone, double the customer figure at December 2008. It also announced it had entered into a strategic partnership with Telstra in Australia.
Xero said today it had significant market opportunities and was rapidly scaling its business.
The fundraising announced today was different from other recent fundraisings by companies which were seeking to restore their balance sheets and repay bank debt, Xero said, adding that it had no bank debt on its balance sheet.
The raising of new capital would enable the company to push further ahead in the British and Australian markets and enter the United States market.
- NZPA
