Cloud accounting firm Xero today announced it landed $US110.8 million in funding from a round led by top tier VC firm Accel Partners.
The company is now looking at acquisitions and investing in product development as it works towards a possible US IPO which could happen next year if the conditions are right, Xero CEO Rod Drury said.
The company has been hiring madly in the US and pushing into the UK market. Drury said he liked that Accel was active in both markets and that “it made sense” to have them as a partner.
“It gives us a whole lot of options. We could do some acquisitions if we see anything interesting,” he said.
“We can invest in much more innovation. We’ll definitely be doubling down on product.”
Accel has previously invested in other Australian companies, including leading a $35 million round in Invoice2Go and $US60 million in Atlassian.
Atlassian is tipped to IPO in the US later this year after hiring its new CFO, former real estate platform Trulia’s director and audit committee chairman, Erik Bardman.
Xero today announced it had hired former Dell exec Russell Fujioka as its US president and former Salesforce CFO Graham Smith would join the board.
Drury said it’s “definitely” still looking at listing in the US early next year if the market conditions are right.
“The main reason we’d list in the US is for marketing and brand building,” he said. “This just makes it slightly easier. We don’t have to do anymore capital raising before an IPO.”
But the latest round of funding does buy the company some more time so it can wait for the right market conditions, Drury said.
He wants to make sure its new US team has a few runs on the board first and that there is some “predictability in the business”.
“We’ll be in a position to go early next year,” he said. “The main thing is we want to do the $US100 million in full year revenue so we’ll get there in March.
“We need two or three quarters of performance from our newly formed US team.
“It’s still something we’d really like to do.”