Peter Thiel to Invest in Xero

Part of our US strategy is to work with the best people in the Industry.  Over the last few months we’ve had the opportunity to connect with some of our heroes – a group of people that we believe are the global leaders in Internet. We’re really proud that they are enthusiastic about our business, understand what we’re doing and that they want to help us.

Today we have a big announcement …

US Technology Guru Peter Thiel to Invest in Xero

Leading online accounting software provider Xero Limited [NZE:XRO] today announced that Peter Thiel, the San Francisco based investor and Silicon Valley authority, has agreed to invest NZ$4 million to support Xero’s expansion into the US market. He will also join Xero’s US Advisory Board.

Mr Thiel co-founded and led PayPal, the online payments company, which was acquired in 2002 by eBay for US$1.5 billion. He was also the first external investor in Facebook, and serves on its board. He is currently President of Clarium, a San Francisco based global macro fund manager.

The investment in Xero will be made through Valar Ventures LP, Mr Thiel’s New Zealand investment firm. Valar Ventures focuses on helping New Zealand companies in the post-revenue phase move into global markets. The Xero placement is the firm’s inaugural investment.

The capital raising, made via a placement, is expected to close next week and will be priced at NZ$1.4918 – the volume-weighted average share price of Xero over the thirty trading days prior to 20 October 2010.

“Millions of small and medium-sized businesses need an online accounting solution, especially in this time of increasing regulatory and tax complexity,” said Peter Thiel. “Xero’s tight focus, robust product, and strong team should enable it to expand tremendously in the United States.”

“We are delighted to welcome Peter and his team at Valar Ventures as strategic investors in Xero,” said Xero CEO Rod Drury. “Access to their extensive networks will provide a major boost as we take on Quickbooks in the vast US small business market. We have taken a measured approach to our US market entry so far. With the support of Peter and his team, we believe we are now strongly positioned to enter the US and capitalise on the opportunity that this market represents.”

45 Comments

Campbell Yule
October 10, 2010 at 8:28 am

Wow! Great work guys this is an amazing annoucement!

Ari
October 10, 2010 at 8:34 am

Nice work Bro!

Stuart Maxwell
October 10, 2010 at 8:35 am

Well done team! That’s great news and a real validation for your efforts in the US. Onwards and upwards!

Andrew Haynes
October 10, 2010 at 8:40 am

Holy smokes! That’s a massive announcement, well done.

Julian A Waters
October 10, 2010 at 8:40 am

This is really exciting for NZ Tech – you’re doing great things putting us on the (tech investor) world map.

Justin
October 10, 2010 at 8:41 am

Hi Rod, Great news for the push into the US! Will this be a dilution to existing shareholders? Cheers, Justin

Campbell Yule's Blog » New Xero Investor
October 10, 2010 at 8:44 am

[…] the Xero Blog today: US Technology Guru Peter Thiel to Invest in […]

Guy Horrocks
October 10, 2010 at 8:46 am

Congratulations. Surely a huge step towards cracking the US market.

iphone app development co
October 10, 2010 at 8:54 am

Great news for Xero.
Great investment for Peter.
Congratulations to all.

Mark Clare
October 10, 2010 at 9:00 am

Congrats guys – this is huge news for both Xero and New Zealand.

Meena Kadri
October 10, 2010 at 9:47 am

Proud day for NZ and for Xero. Well deserved guys.

Simon Swords
October 10, 2010 at 10:23 am

Great job guys, you deserve the investment and I look forward to watching you grow!

Chee Pang
October 10, 2010 at 10:54 am

Congratulations that is huge news. With Xero joining Peter Thiel’s A-List portfolio hope it greatly enhances the exposure of Xero and NZ tech startups in the US Market. Well done.

Earl Rudolfo
October 10, 2010 at 11:18 am

Way to go, Rod and the Xero team. Looks like you’re finally stepping out (officially) into the North American small business marketplace. Can’t wait to see how things shape up in 2011 here. Watch out QuickBooks, Xero is going to be the new kid on the block -:)

Matthew Miller
October 10, 2010 at 12:34 pm

Outstanding news Rod and the team. All the very best of luck in cracking the US market.

PayPal founder Peter Thiel invests in Xero « Woodward Partners Investment Bankers
October 10, 2010 at 12:53 pm

[…] to the Xero team for attracting US-investor Peter Thiel to the company (release). Peter Thiel was a co-founder of PayPal (sold to eBay for US$1.5 billion) and the first external […]

Blair Hughson
October 10, 2010 at 1:32 pm

Awesome news guys =)

Joel
October 10, 2010 at 1:38 pm

Nice work guys!

Ben Keehan
October 10, 2010 at 3:29 pm

Good on ya Rod,,,, I suppose youll need to get rid of your iphone and step up to a Galaxy Tab ,, this is what the grown ups use these days.

Adam W
October 10, 2010 at 3:46 pm

Talk about big fish!

Peter Thiel Invests $3 Million In Xero To Support Its US Expansion | BJD Productions Blog
October 10, 2010 at 1:52 am

[…] founder and early Facebook investor and board member Peter Thiel has invested NZ$4 million (that’s about $3 million USD) in online accounting software company Xero to support its […]

Peter Thiel Invests $3 Million In Xero To Support Its US Expansion | JetLib News
October 10, 2010 at 1:54 am

[…] founder and early Facebook investor and board member Peter Thiel has invested NZ$4 million (that’s about $3 million USD) in online accounting software company Xero to support its […]

Adam
October 10, 2010 at 4:52 am

As an existing investor this gives me a great boost of confidence as to the potential worth of Xero.
My question is what stage does Thiel think Xero is at? Is this an early investment, or late?

Peter Thiel Invests $3 Million In Xero To Support Its US Expansion | Kimberlyleino's Blog
October 10, 2010 at 7:31 am

[…] PayPal founder and early Facebook investor and board member Peter Thiel has invested NZ$4 million (that’s about $3 million USD) in online accounting software company Xero to support its […]

Ben Kepes
October 10, 2010 at 7:34 am

@Adam – this is Peter Thiel, $4 million doesn’t constitute a late investment by his criteria. This is the guy who dropped $500k on a whim on some kid with a social network idea (and yeah, that original $500k is worth like $5 billion now). Investors like this throw money at stuff like spaghetti on a wall, waiting to see what will stick.

Which isn’t to understate the importance of this deal – it’s rare for these guys to look outside of Silicon Valley let alone to a little lump of rock at the end of the world. This is undoubtedly a coup for Xero, but don’t be thinking that Peter sees this in any way as a priority for him….

James Riddell
October 10, 2010 at 11:59 am

I think you’re understating Peter’s talent for investing though Ben. He appears to have a significantly better hit rate than you’d get by throwing money at stuff.

Jason M Blumer
October 10, 2010 at 12:34 pm

Welcome to the US, excited to see you shake up the US accounting market.

Ben Kepes
October 10, 2010 at 4:16 pm

@James – you should investigate how many investments successful people make for every on that hits pay day… it’s a case of shoot enough rounds and something will hit (not to demean Peter at all, but it’s a fact)

Andrew Haynes
October 10, 2010 at 4:29 pm

@Ben successful people like Warren Buffet? (just pointing out that you’re generalising, I don’t know much about Peter’s strike rate)

Ben Kepes
October 10, 2010 at 4:49 pm

Andrew – do a bit of research about how many investment Angel’s in the US do – people like Andreeson, Thiel, Conway, Feld et al – they generally (a generalization but a valid one) do many more deals that the ones you hear about being successful…

Hell, for that matter look at how many deals get done here in NZ that go nowhere…

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October 10, 2010 at 8:11 pm

[…] founder and early Facebook investor and board member Peter Thiel has invested NZ$4 million (that’s about $3 million USD) in online accounting software company Xero to support its […]

Arun
October 10, 2010 at 9:01 am

Excellent news. Well done Xero.

James Riddell
October 10, 2010 at 12:44 pm

I get the gist of how Venture Capital works Ben. I just think your spaghetti analogy implies the investor needn’t put any effort in to each investment as long as they do enough of them. You should investigate the typical value of Peter’s publicized VC investments – Xero appears to be comparatively big. Not that i’d pretend to know where his priorities lie.

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October 10, 2010 at 1:01 pm

[…] week Xero announced that Peter Thiel has invested in Xero as part  of its US expansions plans. Congratulations to Xero are well deserved for being so bold […]

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October 10, 2010 at 3:05 pm

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October 10, 2010 at 1:54 pm

[…] enjoyed supporting Xero’s move into the North American market.  And with recent announcements of additional investment from Peter Thiel, founder of PayPal, Xero continues it’s march into […]

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November 11, 2010 at 6:35 am

[…] our additional investment from Peter Thiel were looking to hire great people to accelerate Xero in the US […]

Garry
January 1, 2011 at 9:40 pm

If Xero is doing so well why does it need Peter Thiel $4m. Xero should have no trouble in financeing its expansion from its own returns. This all sounds like a marketing ploy. After 4 yrs Xero is still in negative territory and is yet to show a return to its shareholders

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January 1, 2011 at 3:38 am

[…] made two noteworthy venture investments there in the space of a few months. In October 2010, he invested $3 million in online accounting firm Xero, which is based (and publicly traded) in New Zealand. Then he […]

Good foreign investment | Kiwiblog
January 1, 2011 at 12:02 pm

[…] made two noteworthy venture investments there in the space of a few months. In October 2010, he invested $3 million in online accounting firm Xero, which is based (and publicly traded) in New Zealand. Then he […]

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February 2, 2011 at 1:52 pm

[…] is very interesting and informative world. For other opinions and approaches, find out what leader Peter Thiel has to say. The world of […]

Brendon Manson
March 3, 2011 at 1:22 pm

Nice investment into xero, be nice if Peter was able to invest into my company i-text with our SMS Search engine

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June 6, 2011 at 1:14 am

[…] Valar Ventures, a fund specifically investing in growth phase New Zealand tech companies. Valar already invested in Xero, a SaaS accounting product and Pacific Fibre, a telecommunications company planning to build a high […]

Vendor viability, the Xero analysis AccMan
July 7, 2011 at 7:21 am

[…] the quality of those promoting the deal and the quality of those who are investing. In 2010, Xero announced an inward investment by Peter Thiel as part of the longer term strategy to make a push for the US markets. I was less than impressed […]

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