Cloud accounting software provider Xero Inc. has raised $49 million from existing U.S. investors Matrix Capital Management and Valar Ventures primarily to further fund their global expansion and growth toward 1 million customers.
In February, Xero completed a $20 million round of financing through a placement to existing strategic investors, which was earmarked for similar purposes. The company claims to currently have over 100,000 paying customers and 200,000 users in more than 100 countries around the world.
[IMGCAP(1)]The New Zealand-based company, which also opened a U.S. office last summer, has doubled its revenue and customer base, integrated with ADP’s online payroll platform and Bill.com’s online AP/AR service, and acquired practice management suite WorkflowMax. The company expects to yet again double its operating revenue for the full year to March 31, 2013.
Specifically, Xero is hoping to invest in its operations and infrastructure in Australia, UK, and the U.S. where it already has offices in San Francisco, Atlanta, Texas, and Los Angeles. The company is also looking to grow and market its product to become a more formidable competitor in the accounting software space.
“The money is great and having investors re-up is really an affirmation of what we’re doing, but it doesn’t change our overall strategy much. It does help us accelerate and some things around brand awareness that we can do,” said president of Xero’s U.S. operations Jamie Sutherland. “The reason for the raise was mainly to support growth towards 1 million customers, but we can also invest across the board in our product and staff, not just in the U.S. but in Australia and the UK as well. Because we’re a global company we can give our customers 24/7 support and I think that also gives us an edge.”
In addition, Sutherland also noted that Xero is eying some top U.S. firms who want to design their outsourced accounting practices around Xero.