TCV, a US venture capital firm that invests in mature tech startups, has acquired a $NZ28.6 million ($26.4 million) stake in cloud accounting software provider Xero.
The announcement, made Tuesday morning to the NZX, revealed Matrix Capital Management had executed an off-market sale just before Easter of more than 1.4 million shares to TCV at a price of $NZ20 each.
Settlement will occur next week on April 26.
Xero chief operating and financial officer Sankar Narayan said that it’s “routine” that early-stage investors “rebalance” their portfolios.
“We’re thrilled to receive strong support from new investors who are ready to join Xero for its next phase of growth,” he said.
Business Insider reached out to TCV, but the firm declined to comment.
The move comes just days after Donald Trump’s transition team member and tech billionaire Peter Thiel sold $23 million of his Xero shares, bringing his stake to below the reporting threshold of 5%.
Last September, TCV and Google Capital led a $555 million funding round for Airbnb, while other household names like Facebook, Spotify and Vice Media have benefited from its support in the past.
Wellington-headquartered Xero has been locked in a bitter battle against incumbent MYOB for dominance in the accounting software market. The startup last month celebrated reaching one million subscribers on its software-as-a-service platform, with chief executive Rod Drury saying it was “very satisfying” to fulfill a promise made to shareholders more than five years ago when the company only had 50,000 customers.
MYOB claims a user base of 1.2 million businesses in Australia and New Zealand, although that figure may include licensees of its older non-cloud products.
The investment required to get to this point has had a bearing on Xero’s bottom line, with it reporting a $NZ82.5 million net loss for the 2016 financial year. The 2017 results are due to be announced in May.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.