New Zealand-founded accounting software firm Xero has raised a $110.8 million round of capital to grow its business in the North American market.
Xero — which provides online accounting software for small/medium businesses and accountants — said that the new funds come from Accel Partners and Matrix Capital Management, its largest institutional investor. Accel is providing the lion’s share of capital in the deal — $100 million at a $15.052 per share value — which is expected to close by the middle of March 2015.
The money will be put to work growing the company’s business in the U.S. and, on that note, Xero is also bolstering its U.S. and global team with a new hire. Russell Fujioka, formerly of Dell and a current partner at Bessemer Venture Partners, has taken on the role of U.S. president, based out of Xero’s San Francisco office. In addition, former Salesforce CFO Graham Smith has joined the Xero board as a non-executive director.
Xero beefed up its U.S. team in February 2014 when it hired a U.S. CEO, new board director, and an additional U.S.-based director to its team. Its inaugural U.S. CEO, Peter Karpas, has since moved on, and it looks like Fujioka has taken on his responsibilities (and more) with this new role.
There’s plenty of competition in the accounting software space in the U.S., and Xero must do battle with Intuit, arguably the biggest player in the space, and smaller rivals like Freshbooks.
Accel partner Andrew Braccia believes that Xero — which claims to have more than 400,000 small businesses on its books — has what it takes to compete though:
Accel always looks for enduring technologies with global reach and we see the need and opportunity for millions of small businesses to grow on Xero’s platform. We’ve worked with several other leading companies in the region to broaden their global reach and we hope this experience will be valuable as Xero’s strong leadership team looks to expand in the United States.
Prior to today, Xero had raised over $240 million from investors, according to CrunchBase. Its most recent round was $150 million in October 2013, led by Peter Thiel-backed Valar Ventures and Matrix Partners.