More capital, SPP and WorkflowMax

Exciting day for our Xero team with a few big announcements.

Firstly we’ve raised $20 million from existing Directors and major shareholders. We are thrilled with the internal support. This allows us to continue to accelerate our growth plans.

We have also launched a Share Purchase Plan (SPP) that allows other shareholders to participate on the same basis.  SPP’s are a mechanism that allows listed companies to raise capital inexpensively. We particularly like SPP’s as small shareholders are looked after – which is very important to us.

Share purchase plans allow a company to issue up to NZ$15,000 worth of shares to existing shareholders utilising a fairly short, simple offer document. The rationale for the Exemption Notice is that a full disclosure document, such as an investment statement, is not necessary given that issuers are subject to the continuous disclosure requirements of the NZX and thus existing shareholders will be fully informed about the company.

If you are a shareholder on the 14th of February you will receive SPP information in the mail.

Click here for the full Capital Raising and SPP announcement.

Our next bit of news is we have acquired leading Xero Partner WorkFlowMax.

We’ll talk more about this at XeroCon tomorrow and give you all an update on our plans when we’re back on deck next week.

Congratulations to Gavin and Chris and the fantastic WorkflowMax team. We’ve been working with them for years and we’re very excited to welcome them to our team.

Click here for the for the WorkflowMax acquisition announcement.

We will be establishing a development office in Auckland hopefully providing access to even more talent to join our team.

As always, we welcome your comments and questions below.

We’re growing

Next week is a huge event for us, our local #XeroCon where we have over 400 accountants and bookkeepers joining our team in Auckland. As a public company we’re subject to continuous disclosure of material information, so in order to talk freely next week we’ve just updated the market on some key metrics.

You can see the release here.

The key points and some additional commentary are as follows:

• Operating revenue for the full year ended 31 March 2012 will double 2011 (which was $9.3m).
• Committed Monthly Revenue (CMR) is now $1.75m or $21m annualized. We’re delighted that 50% of CMR is from offshore markets showing that we becoming a truly global company.
• Paying customers using the Xero business software worldwide exceeds 60,000. There are 240,000 user accounts.
• There are over 3,300 accounting firms now using Xero. The accountant and bookkeepers channel model, proven in New Zealand, is showing similar early signs of success in offshore markets.
• The company now employs 170 staff across four countries. The US sales office has been established with six staff in San Francisco.

We know we still have a lot to do, but we’re firing on all cylinders – and still hiring. We still think we’re just at the beginning of this ride and we have so much more we want to do.

Huge thanks to our customers and especially to our hard working team to continue to deliver such outstanding growth.

Any questions please fire away.  We’re always happy to share experiences and we’re still learning.

A blog about the blog

Wow! We scored some major negative feedback recently about some of our guest posts. Who’d have thought our followers would be so passionate about the blog.

Lance even posted about it.

We were trying to do two things:

1. Have some non Xeroes create helpful content for small business owners, especially the non tech savvy.
2. Have established international writers create Xero sponsored content on other sites to drive link traffic back to us.

We learned that:

1. Having others outside of the Xero community writing our blog turns some of our followers off. (We acknowledge there were posts that did generate a huge amount of positive feedback).
2. The guest posts didn’t generate significant traffic back from other sites.

So lesson learned.

We love that our community gives us such candid feedback and we appreciate you taking the time to talk to us.

Half year numbers

This morning we put out our half year results.  As one of the few early stage public SaaS companies we know these generate a lot of interest and we’re happy to answer questions as much as we can.

You can read our market release here: Xero gaining offshore momentum

The main messages are:

1. Recurring revenues are growing solidly.  Our last years full year revenue was $9m and so to do almost $8m in the first half is very pleasing. Monthly committed subscription revenue now running at $1.5m
2. Growing revenue in multiple geography’s
3. We’ve reduced a lot of risk in the business – still a lot of hard work to do of course, but a lot of startup, execution, product and market risk has been reduced
4. Incumbents not executing
5. Continuing to invest in growth and capability