Cloud-based accounting solution provider Xero's recent expansion of its U.S. executive team is an indication of its deepening commitment to the North American market, according to incoming CEO Peter Karpas -- and that it's no longer as much of an underdog.
Karpas was appointed last week, along with new U.S. board chair Chris Liddell and director Bill Veghte (see "Xero Appoints New CEO, Board Leaders"). In an exclusive interview, he said, "What does this mean from the standpoint of the other competitors in the market? What we're saying here is, when you get the kind of people on the board that we've got, like Chris and Bill, it's no longer David versus Goliath. David's grown up, and we're in the big leagues now."
Karpas, who joins Xero on February 24 after stints as an executive at PayPal and Intuit, said, "The big thing is, Xero is clearly doubling down on the U.S. market -- we had the $150 million [investment] round a few months ago, and now this is sort of the next step, which is to bring in more U.S.-based leadership to really drive the growth of Xero in the U.S."
In terms of his near-term plans, Karpas is in no hurry to shake things up: "My immediate priority is just to go start and ask a lot of questions. ... Things are going well already for Xero - nothing's broken. This is a matter of how we do we make something that is successful even more successful. That means it's really important for me as the incoming CEO to ask a bunch of questions before I make a whole bunch of assumptions and decisions."
He noted that he'd already been in contact with Xero's current U.S. president, Jamie Sutherland: "Jamie and I have had many long conversations ... I don't expect Jamie's job to change all that much, because he's been doing a good job, and he's still the president."
Beyond the short term, Karpas agreed that an initial public offering might make sense for the company. "An IPO would be a natural extension of the moves Xero is making in the U.S., but it really is pending the continued growth and momentum of the company," he said. "So there are no plans to do an IPO - the company's not there yet, but it's on the trajectory, and hopefully if things go the way we expect them to go, it would be a natural way for us to go. But that's further out -- right now, the bigger focus is how do we get more people to understand how good Xero is for them."
Accounting in the family
In speaking of what drew him to the position, Karpas noted his longstanding ties to the small-business community: "I grew up in a small-business family; my mom is an accountant, and I believe in the importance of small and medium businesses and know how hard their lives are, and that's why I've gravitated to working in SMB-oriented companies, and I know how much help these people need and how much we can bring. I think the Xero product and approach -- particularly around partnering, integration with all the 3rd party add-ons, the mobile-first nature -- I think it's a great solution that can help."
He noted that his mother had heard of Xero, though "not as much as I would have hoped. .... She keeps up on this stuff, and it's been quite funny as I started to talk to Xero to hear her talk about it, because there's a big change going on in the U.S. for accountants, and Xero's driving that change. It's exciting."