Accountancy software company Xero has raised $15 million to fund global growth and has made its first acquisition for the year, snapping up Max Solutions in a deal worth almost $5 million.
Xero, which designs accounting software for small businesses and their advisors, has 60,000 customers in more than 100 countries, with teams across Australia, New Zealand, the United States and the United Kingdom.
Having formed partnerships with Telstra and ANZ, Xero’s revenue in Australia rose to $1.4 million for the six months to September 30, 2011, making it the company’s fastest-growing region.
Globally, Xero expects its operating revenue for the full year ended March 31, 2012 to double 2011 revenue of $7.2 million
It’s been revealed the company has now raised $15 million from existing strategic investors to support its future growth in the Australian, UK and US markets.
Investors include Sam Morgan of Fairfax Media, MYOB co-founder Craig Winkler, and Valar Ventures, the New Zealand investment vehicle of Paypal co-founder Peter Thiel.
Xero has also acquired Max Solutions, which developed job, time and invoice management solution Workflow Max, brought to the market in 2008.
“Both of these announcements support Xero’s rapid growth here in Australia and the rest of the world,” Xero Australia managing director Chris Ridd said in a statement.
“We continue to transform the accounting industry by helping them embrace the cloud.”
“Many of our customers are WorkflowMax customers so this, together with Paycycle [acquired by Xero for $1.5 million last year] gives us a very powerful combination.”
Based in Auckland, Max Solutions was founded in 2007 by Gavin George and Chris Spence, with the aim of building a job management solution to be delivered across the internet.
In an acquisition worth $4.6 million, Max Solutions will help Xero provide a full suite of online tools to accountants, enabling them to operate without expensive in-house servers.
Both George and Spence will become part of the Xero team, bringing with them all other Max Solutions staff.
“We are genuinely excited about the enormous opportunities this affords both the WorkflowMax team and the product itself,” George said in a blog.
“When we founded WorkflowMax back in 2007, we always envisaged that WorkflowMax would be a truly global solution… We have a significant opportunity to achieve this goal.”
George said customers’ data will continue to be hosted on its Rackspace servers and there will be no loss of service. There will also be no change in the current subscription pricing.
The company will continue to develop and support the product, and will continue to support its existing interfaces with all accounting products.
“What will happen is that the WorkflowMax team will grow,” George said.
“We will bring in more development, support and implementation staff. We will have access to some of the best user interface designers and infastructure experts in the country.”
“WorkflowMax as a product will evolve and improve faster for the betterment of all users. We see a huge positive upside for our entire client base.”