Xero Limited is a New Zealand–based technology company that provides cloud-basedaccounting software for small businesses. The company has offices in New Zealand, Australia, the United Kingdom, the United States, Canada, South Africa and Singapore.[7][8] Xero's products are based on the software-as-a-service model and sold by subscription, based on the type and number of entities managed by the subscriber.[9] The products are used in over 180 countries.[10][11]
History
In 2006, Xero was founded by Rod Drury and Hamish Edwards in Wellington,[12][13][14] where Xero Limited's headquarters are still located.[15] The company was originally called Accounting 2.0.[14]
By 2017, Xero had more than one million customers globally,[16] and the following year, it had more than one million subscribers in Australia and New Zealand.[17] In April 2018, Steve Vamos was appointed as CEO, replacing Rod Drury who remained on the board as a non-executive director until 2023.[18] Vamos announced in November 2022 that he would step down in February 2023 and be replaced by Sukhinder Singh Cassidy, a former executive of Google and StubHub.[19][20]
In 2019, the company announced it had over two million global subscribers,[21] and three million subscribers in September 2021.[22]
In March 2023, Sukhinder Singh Cassidy, the CEO of Xero, announced the removal of 700-800 roles across Xero, representing approximately 15% of the employee base.[23] At this time, the company reportedly had more than 3.5 million subscribers and about 4,500 staff across offices in New Zealand, Australia, North America, the UK and southeast Asia.[24] The company announced it had finished its job cuts by November 2023, reducing headcount to 4,242 staff.[25]
Product
The Xero accounting software uses a single unified ledger, which allows users to work in the same set of books regardless of location or operating system.[26] It provides automatic bank feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, bank reconciliations, and standard business and management reporting.[27]
In 2011 and 2012, the Xero Touch mobile apps for iOS and Android devices were released.[28]
In the 2019 financial year, Xero offered services relating to Making Tax Digital in the United Kingdom,[29]Single Touch Payroll in Australia,[30] and Payday Filing in New Zealand.[31]
Xero transitioned to a sole listing on the ASX on 5 February 2018, delisting from the NZX on 2 February 2018.[34] In September 2019, the market capitalisation of Xero on the ASX exceeded NZ$10 billion, and it was ranked as the third most valuable publicly listed New Zealand company.[35]
Xero has also received funding from various investors. In 2009, it received NZ$23 million of funding led by MYOB founder, Craig Winkler.[36] It raised an additional NZ$4 million in 2010 from Peter Thiel's Valar Ventures who also invested an additional US$16.6 million in February 2012.[37] It raised $49 million in a funding round in November 2012 with the largest amounts coming from Peter Thiel and Matrix Capital.[38] The company raised more than $100 million at a valuation of approximately $1.4 billion on the NZE by May 2013.[39][40] This valuation was before receiving an additional NZ$180 million from Thiel and Matrix in October 2013, bringing total funding to more than $230 million.[41] Xero raised an additional $100 million from Accel and $10.8 million from Matrix Capital on 25 February 2015.[42] On 5 October 2018, Xero announced a settlement of US$300 million in convertible notes, more than previously raised by a New Zealand or Australian company not listed in the United States.[43]
Acquisitions and partnerships
In July 2011, Xero acquired the Australian online payroll provider Paycycle for a mixture of cash and shares totaling NZ$1.9 million, to integrate the company's products into its services.[44] It acquired Spotlight Workpapers in July 2012 for a mixture of cash and shares totaling $800,000.[45]
In July 2018, Xero formed a partnership with US payroll platform Gusto.[46] In August 2018, it acquired Hubdoc, a data capture application.[47] In November 2018, it acquired cloud-based accounts preparation and tax filing application Instafile for £5.25 million.[48]
In August 2020, Xero acquired Waddle, an Australian-based invoice financing startup, for A$80 million. The payment included $31 million in cash and $49 million in earnout payments. Waddle allows small businesses to access loans secured by their accounts receivables.[49][50] In March 2023, Xero announced it was cutting jobs and closing the Waddle app.[51]
In November 2021, it acquired inventory management provider Locate Inventory for US$19 million,[52] and in December 2021, Xero announced it was acquiring Canadian tax software provider, TaxCycle, for CA$75 million.[53]
In November 2022, Xero announced the establishment of a technology base in India in partnership with technology outsourcing company Infosys.[54] The India technology base includes engineering and developer roles.[54]
