Xero (company)

Xero Limited is a New Zealand technology company that provides cloud-based accounting software for small businesses. The company has offices in New Zealand, Australia, the United Kingdom, the United States, Canada, South Africa and Singapore.[7][8] Xero's products are based on the software-as-a-service model and sold by subscription, based on the type and number of entities managed by the subscriber.[9] The products are used in over 180 countries.[10][11]

History

In 2006, Xero was founded by Rod Drury and Hamish Edwards in Wellington,[12][13] where Xero Limited's headquarters are still located.[14] The company was originally called Accounting 2.0.[15]

By 2017, Xero had more than one million customers globally,[16] and the following year, it had more than one million subscribers in Australia and New Zealand.[17] In April 2018, Steve Vamos was appointed as CEO, replacing Rod Drury who remained on the board as a non-executive director until 2023.[18] Vamos announced in November 2022 that he would step down in February 2023 and be replaced by Sukhinder Singh Cassidy, a former executive of Google and StubHub.[19][20]

In 2019, the company announced it had over two million global subscribers,[21] and three million subscribers in September 2021.[22]

In March 2023, Sukhinder Singh Cassidy, the CEO of Xero, announced the removal of 700-800 roles across Xero, representing approximately 15% of the employee base.[23] At this time, the company reportedly had more than 3.5 million subscribers and about 4,500 staff across offices in New Zealand, Australia, North America, the UK and southeast Asia.[24] The company announced it had finished its job cuts by November 2023, reducing headcount to 4,242 staff.[25]

In May 2024, the company announced it had achieved a Rule of 40 outcome of 41.0%, followed by a Rule of 40 outcome of 43.9% in November 2024.[26]

In June 2025, Xero announced an agreement to acquire Melio, a New York-based payments provider, for $2.5 billion.[27]

Products

The Xero accounting software uses a single unified ledger, which allows users to work in the same set of books regardless of location or operating system.[28] It provides automatic bank feeds, invoicing, accounts payable, expense claims, fixed asset depreciation, purchase orders, bank reconciliations, and standard business and management reporting.[29]

In 2011 and 2012, the Xero Touch mobile apps for iOS and Android devices were released.[30]

In the 2019 financial year, Xero offered services relating to Making Tax Digital in the United Kingdom,[31] Single Touch Payroll in Australia,[32] and Payday Filing in New Zealand.[33]

In 2026 Xero announced a partnership with Anthropic to add AI to their accounting software.[34]

Funding

Xero went public on the New Zealand Exchange on 5 June 2007, with a NZ$15 million IPO, gaining 15% on its first trading day.[35] It went public on the Australian Securities Exchange (ASX) on 8 November 2012.[3][36]

Xero transitioned to a sole listing on the ASX on 5 February 2018, delisting from the NZX on 2 February 2018.[37] In September 2019, the market capitalisation of Xero on the ASX exceeded NZ$10 billion, and it was ranked as the third most valuable publicly listed New Zealand company.[38]

Xero has also received funding from various investors. In 2009, it received NZ$23 million of funding led by MYOB founder, Craig Winkler.[39] It raised an additional NZ$4 million in 2010 from Peter Thiel's Valar Ventures who also invested an additional US$16.6 million in February 2012.[40] It raised $49 million in a funding round in November 2012 with the largest amounts coming from Peter Thiel and Matrix Capital.[41] The company raised more than $100 million at a valuation of approximately $1.4 billion on the NZE by May 2013.[42][43] This valuation was before receiving an additional NZ$180 million from Thiel and Matrix in October 2013, bringing total funding to more than $230 million.[44] Xero raised an additional $100 million from Accel and $10.8 million from Matrix Capital on 25 February 2015.[45] On 5 October 2018, Xero announced a settlement of US$300 million in convertible notes, more than previously raised by a New Zealand or Australian company not listed in the United States.[46]

Acquisitions and partnerships

In July 2011, Xero acquired the Australian online payroll provider Paycycle for a mixture of cash and shares totaling NZ$1.9 million, to integrate the company's products into its services.[47] It acquired Spotlight Workpapers in July 2012 for a mixture of cash and shares totaling $800,000.[48]

In July 2018, Xero formed a partnership with US payroll platform Gusto.[49] In August 2018, it acquired Hubdoc, a data capture application.[50] In November 2018, it acquired cloud-based accounts preparation and tax filing application Instafile for GB£5.25 million.[51]

In August 2020, Xero acquired Waddle, an Australian-based invoice financing startup, for A$80 million. The payment included $31 million in cash and $49 million in earnout payments. Waddle allows small businesses to access loans secured by their accounts receivables.[52][53] In March 2023, Xero announced it was cutting jobs and closing the Waddle app.[54]

In November 2021, it acquired inventory management provider Locate Inventory for US$19 million,[55] and in December 2021, Xero announced it was acquiring Canadian tax software provider, TaxCycle, for CA$75 million.[56]

In November 2022, Xero announced the establishment of a technology base in India in partnership with technology outsourcing company Infosys.[57] The India technology base includes engineering and developer roles.[57]

In April 2024, Xero announced a strategic partnership with workforce management platform Deputy.[58] As part of the agreement, Xero invested US$25 million to take a minority stake in Deputy and announced plans to embed Deputy’s shift work management capabilities into Xero’s payroll platform for Australian customers.[59]

In September 2024, Xero announced the acquisition of cloud-based reporting, insights and analytics platform Syft Analytics for up to US$70 million.[60]

In June 2025, Xero agreed to acquire US company Melio for US$2.5 billion in cash and stock, and up to $500 million in additional payments over three years. Melio co-founder and CEO Matan Bar will lead the US operations of the combined business.[61][62] Xero wants to grow in the U.S. which the company says is about 7% of its sales.[63]

See also

• Comparison of accounting software

External links