As the company announced, the whole capital raising activity is to scale the business and expand its oversea market. But it did not give much detail in how the business will do with these extra cash. I guess increasing marketing and extended operation would be the major cash burner. I wonder if more detail would be given in the future (maybe in the annual report) if possible?

We’ve never talked about discrete users. Our customer count is organisations that pay. If you run two entities on Xero we count that as two customers. They may have 10 users that can access those two organisations but we don’t talk about that as it’s not an indicator of revenue growth.

Where user count does become more interesting will be when we kick off a referral program because it gives us many more people to help spread the word.

We also don’t count customers until we have billing details. So any trial customers are not counted. Also all numbers we publish are net of churn (which is very small anyway).

So we take a conservative and responsible approach to counting customers.

Hope that makes sense,

Rod

You mention the word users, the term has previously been referred to as customers. I have always taken an assumption of what this means but can you please clarify what a user/customer is?, and has this definition ever changed?

If I have 2 subscriptions am I 1 or 2? What if I have 2 users able to access one of the subscriptions, is that 1, 2 or 3?!

You have no idea how happy it makes us for you to say that 1-2000 users are old hat.

Rod

Here is the information you were after:

http://www.xero.com/downloads/pdf/announcements/150409-spp-details.pdf

Rod

Do you still plan to issue regular market statements regarding user volumes? The 1-2000 new user updates are pretty old hat now, but updates for every 5 or 10,000 block would be much appreciated.

How many shares does one need to own, to be an eligible share holder?

We’re just finalising the details around the SPP and willl be communicating this to the NZX, shareholders and on our website in the next few days.

Exciting move, and great to see the right amount of money needed to let you and the crew keep taking this to the next level.

@Caleb

1. Xero is a global company with many international shareholders, but we are listed on the NZX, create jobs here and in other countries and pay tax in New Zealand. The vast majority of our shareholders are from NZ.

2. Craig is no longer involved with MYOB and will add significant value to Xero. We are building a long term business and will continue looking for partnerships. We have far too many cool things to do for small business owners to even think about a take over. Been there done that.

@Bruce. Yes all cash. That passage was needed because of how CW had engaged his advisors.

@Charles

1. Pre profit companies like Xero are still difficult to fund via debt. We’re very appreciate of the ongoing support of the BNZ and NAB group in general. I think it’s awesome that a bank supports a hi-growth company like this.
2. What we’re doing is blurring banking services with small business workflow. Expect to see much more of this in the future. Online banking is one of the first scale examples of SaaS.

Rod

Normally an SPP is put in place to protect smaller shareholders in a dilution. While this isn’t so relevant on a strategic placement that creates value such as what we have announced, we feel it is important to look after those shareholders.

That means that existing shareholders have the ability to buy some more shares at the same price as this round (90 cents). Details will be sent to shareholders sometime over the next week or so to explain how they can participate.

We place a lot of importance on looking after our shareholders, which is why we think it’s a good thing to do.

Hope that makes sense.

Rod