Xero scores investment from second MYOB founder
Friday, February 10, 2012/
Accounting software group Xero has scored an investment from yet another founder of industry leader MYOB, with Brad Shofer upping his stake in the company following a $NZ18 million investment from Craig Winkler.
The move makes Shofer one of the company’s top 20 shareholders, in a transaction that included trades with other firms including Sophrosyne Capital and Matrix Capital Management. It also comes just days after Xero raised a further $15 million.
Shofer left MYOB 20 years after founding it with Winkler, but has been no stranger to investments. Last year he contributed an unspecified amount to taxi mobile app Ingogo.
Xero Australia managing director Chris Ridd told SmartCompany this morning the investments from two founders of the company’s major competitor is a “significant” development.
“It’s very exciting that we have two founding partners of MYOB, who nurtured that company for quite awhile, and it’s just a huge vote of confidence,” he says.
“I’m certainly relatively new to the accounting industry, but Craig Winkler is held in great esteem. I think Brad represents the same, and we have these significant entrepreneurs from the early days of the business who are still making an impact.”
Shofer said in a statement he’s been impressed with what Xero has been able to achieve, and is particularly excited for more global opportunities.
“When I compare the space today with how it was in my MYOB heyday, I see one important difference relating to international expansion.”
“At MYOB, we attempted to make an impact in the large markets of the US and UK, however the model was not easily scalable and we had limited success. With the advent of the cloud, this goal is now much more achievable and I think this is where the real opportunity lies. I see a bright future for Xero.”
Shofer says the additional funds will be used to help push global expansion, although warns the company is keen to do so at a reasonable pace.
“We want to take more market share, and that’s the significant thing. The ability to move forward with this capital really helps us, and not just in Australia or New Zealand.”
“The investment just really helps our profile, and validates our strategy. Their attention is directed towards the cloud, and they’re prepared to make that investment.”
Xero has been active in the investment and acquisition space as well. Last July it acquired a small online payments company, Paycycle, and last week it also raised $15 million from investors and bought New Zealand company Max Solutions.