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More capital, SPP and WorkflowMax

Posted 6 years ago in Xero news by Rod Drury
Posted by Rod Drury

Exciting day for our Xero team with a few big announcements.

Firstly we’ve raised $20 million from existing Directors and major shareholders. We are thrilled with the internal support. This allows us to continue to accelerate our growth plans.

We have also launched a Share Purchase Plan (SPP) that allows other shareholders to participate on the same basis.  SPP’s are a mechanism that allows listed companies to raise capital inexpensively. We particularly like SPP’s as small shareholders are looked after – which is very important to us.

Share purchase plans allow a company to issue up to NZ$15,000 worth of shares to existing shareholders utilising a fairly short, simple offer document. The rationale for the Exemption Notice is that a full disclosure document, such as an investment statement, is not necessary given that issuers are subject to the continuous disclosure requirements of the NZX and thus existing shareholders will be fully informed about the company.

If you are a shareholder on the 14th of February you will receive SPP information in the mail.

Click here for the full Capital Raising and SPP announcement.

Our next bit of news is we have acquired leading Xero Partner WorkFlowMax.

We’ll talk more about this at XeroCon tomorrow and give you all an update on our plans when we’re back on deck next week.

Congratulations to Gavin and Chris and the fantastic WorkflowMax team. We’ve been working with them for years and we’re very excited to welcome them to our team.

Click here for the for the WorkflowMax acquisition announcement.

We will be establishing a development office in Auckland hopefully providing access to even more talent to join our team.

As always, we welcome your comments and questions below.


Ben Kepes
February 2, 2012 at 9.54 am

Congrats guys… all you need now is a nice tool to ease the migration of all those old AO ledgers to Xero. Hmmmmm…

February 2, 2012 at 10.46 am

Will WorkflowMax become part of the Xero monthly fee or will it remain stand-alone product?

Rod Drury Xero
February 2, 2012 at 10.59 am

Hi Anna, It’s business as usual for now. WorkflowMax will stay as it’s own brand and website. They are two quite separate code bases.

We also don’t want to discourage other solutions like WorkflowMax that target specific vertical markets. We want to see good innovation and competition in the Job Management space. We are very conscious of providing a level playing field for partners.

We will be doing a lot of work behind the scenes for WorkFlowMax for Accountants specifically.


Tim C - FGS
February 2, 2012 at 11.12 am

Great news Rod and team. We often get resistance from Accounting Firms when discussing Xero with them because they are worried about the Practice management aspect of things. This exciting news will change the game…again and continue to disrupt the status quo for the better!

February 2, 2012 at 11.28 am

I shudder to say it but team Xero are starting to look like MYOB, once a pure accounting package focus, then a small sideways step to Personal, then a step to include Ozzie payroll, and now Workflow Max to tackle iFirm and AO/AE head on.

Too many distractions from getting the one product right – which I understood, wrongly apparently, was the Xero goal, leave the add-ons to partners and stick to your knitting!

February 2, 2012 at 11.41 am

Great news for both parties. Look forward to future developments…

James R
February 2, 2012 at 1.29 pm

I guess Mr Theil can liquidate his facebook shares easily after today’s IPO confirmation and convert to Xero. I was thinking of updating my 10 year old car but I guess I’ll put it into the SPP instead. Damn it.

Gayle Buchanan
February 2, 2012 at 3.51 pm

bloody marvellous news … nice move guys

February 3, 2012 at 7.07 am

@David…well said … 170 staff and growing and no one can figure the code for a remittance advice…

Andrew Haynes
February 3, 2012 at 11.04 am

@Rod Disappointed that I won’t be able to participate in the SPP as a small foreign shareholder. What’s up with that!? NZ listing rules? I get diluted with no chance to play.

Trading at at >25c premium to the issue price too. *sad face*

Paul Williams (GM Finance - Xero)
February 3, 2012 at 3.09 pm

@Andrew – unfortunately offshore Securities regulations preclude us from offering the SPP outside of NZ. Perhaps you should consider a move to NZ to enjoy our wonderful country and get to participate in the Xero SPP as well!

Rod Drury Xero
February 3, 2012 at 3.42 pm

@Bradan, you’ve made your point I think.

Remittance advices demonstrated today at #xerocon

We’ve gone better than a static pdf and included remittance advices alongside online invoicing. It won’t be the next version but we are well progressed.

February 4, 2012 at 8.33 am

@Rod, Thank you for the reply on remittance advices. Not quite sure I understood your comments and also Craig Walkers presentation post on the Xerocon Live Blog.

When you say ” included remittance advices alongside online invoicing”, are you saying only remittance advices for online invoices through the Xero-to-Xero user features ?

Or remittance advices for all invoice payments irrespective of input ?

Andrew Haynes
February 4, 2012 at 10.45 am

@Paul thanks for the suggestion! I’d love to move to NZ but doubt I could make it in time for the SPP hehe

Rod Drury Xero
February 4, 2012 at 6.09 pm

@braden we demo’d working remittance advices. Have to get a few things tweaked and into testing with some related work. On their way.

February 10, 2012 at 11.04 pm

Great news Rod, but.. have to say I am a little concerned by what today’s news (as on – that you and other founders have sold $5 million worth of shares) says about the confidence the founders have in the future of Xero. Why sell now if the company is going to do so well?

Rod Drury Xero
February 11, 2012 at 8.41 am

@Phil, no need to be concerned. Simply we had substantial interest from new, sophisticated, institutional investors to get on the register. That helps all shareholders as it’s a great validation, provides better price support and assists liquidity.

There are very few chances for founders to take a little bit of risk off the table. The percentages were very small but do make life a bit easier so we can continue to focus on Xero.

Of course the media will do what they do but we checked with our major investors if OK and they were supportive. Doing this at the same price as the SPP etc seemed very fair as well.

So at a personal level we are no less fired up and so excited about the business and building a fantastic global team. I hope it’s obvious we’re having a huge amount of fun.

Having raised significant additional funding with such sophisticated new investors you can imagine the business has been through the microscope by some very smart people.

Here is the main feedback we had

– if anyone can build a global business in this space – it’s Xero
– Great progress in NZ, AU and UK
– Current markets supports value
– Big mid-term upside is traction in the USA
– We need to deliver a few features for the USA market (which we are well through working on)
– Need to show we can win against Intuit (already we are winning awards in the US accounting media so we’re having good early success

As I’ve said many times before but we really are just at the beginning of the journey. With 50% of CMR now offshore we’ve proven we can execute in other geographies so let’s see how big we can make it.

I can promise you it will not be boring to watch.


February 11, 2012 at 12.36 pm

Article back in 23/07/2010 said “Both Mr Drury and Mr Edwards have indicated that they will not sell any more shares until the company reaches financial breakeven, which is forecast to be in the second half of 2011. Mr Drury said Mr Morgan’s investment was “a huge endorsement” of the company’s progress and strategy.”

I’m with Phil, that I am disappointment that you sold more shares, after you said you would not sell any more shares until the company reaches financial breakeven.

Rod Drury Xero
February 11, 2012 at 12.49 pm

Hi Anna, yes we were conscious of that. At our annual meeting mid last year (2011) we publicly changed our strategy to continue to grow rather than chase break even.

Break even is something we are 100% focussed on and personally it will make my life a lot easier when we get there. But the right thing now is to grow – even though we still take a lot of flak for that decision.

On balance, and after taking advice, we decided this was the best thing to do for the us and the company for the reasons explained above. It’s very important we build our institutional investor support and we are thrilled to have those investors on board.

Decision was not taken lightly and we would not have done it if it wasn’t in the best interests of the company.


February 13, 2012 at 11.47 am

I’m indifferent about the decision itself but I’m of the opinion flip-flopping is a _good_ thing. Anyone who can’t change their mind in the light of new information shouldn’t be a running a large company (or a country).

Kelvin Hartnall
February 14, 2012 at 11.52 am

@Rod, I am completely in support of the board’s decision to go for growth instead of aiming for a quick break-even. As a shareholder, a risk that concerns me is failing to maintain a leadership position in this space. I would far prefer to own a stake in a fast growing Xero that leads the market rather than a stake in a profitable Xero that is playing quick follower. Xero is an awesome product that is a delight to use, but I do have concerns when I see that the development team is constrained and failing to deliver some important promised commitments. So I was really pleased when Xero announced the decision to go for growth over the commitment to achieving short-term profitability. Hopefully the recent capital raising will give Xero scope to continue to grow and deliver faster.

Don’t be too concerned about the flak that you will get from some shareholders. You will never make all shareholders happy. Just realise that there are other shareholders who are fully committed to Xero and are excited about the ambition Xero has.

Robbie Dellow
February 14, 2012 at 9.07 pm

As a shareholder I totally agree with Kelvins comments. You will never please all shareholders and the share holders that bought in on the initial promise of a quick break-even now have the choice to sell at a presumed good profit. I support the decision to expand globally for the bigger picture. I am not in the accountancy field but are in IT and see a huge future in the area of Cloud Computing and allowing mobility to users. Bill Gates and the like are reluctantly agreeing too, imho. So lets not focus on the negative take the media has sometimes and prove that this NZ tech company can prove itself on the accounting world stage.

James R
February 20, 2012 at 6.51 pm

Any update on the SPP? I’ve received nothing in the mail and just checking I haven’t missed it. Thanks.

February 20, 2012 at 8.41 pm

@James My SPP forms arrived on Saturday. You can give Link Market Services a call on 09 375 5998 and request them to send them again or they might be able to email you the SPP forms.

Rod Drury
February 20, 2012 at 9.23 pm

Thanks @Anna. Hi @James, team will check for you in the morning. You should have them.


Paul Williams (GM Finance - Xero)
February 21, 2012 at 8.19 am

@James (and all other NZ shareholders) – your SPP forms should have arrived by now, they were mailed mid last week. As @Anna notes if they still haven’t arrived contact our share registrar Link Market Services on 09-375 5998 or by email on


Gavin George: Starting WorkflowMax and the sale to Xero
July 24, 2014 at 6.33 pm

[…] 2012, Xero raised $20 million from existing shareholders and purchased WorkflowMax for $2 million in cash and $4 million in […]

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