Xero IPO

May 13, 2007

Xero IPOSo, the Xero IPO is among us. It will be really interesting to see how this one goes.

On paper, it appears like they’ve valued the company just upwards of about $50m which, considering the actual income earned to date, is a bold move. The word “bubble” is having its fair share of exposure in the rumour mill.

I’ve been a user of Xero for a couple of months now, and there’s no doubt that it is a great web based accounting package. It’s Web2.0 interface is right up there with the best. But is a slick interface, and the ability to share data with your CFO, enough to prize enough market share of the MYOBs, Netsuites and Intuits of this world? Not to mention our beloved Excel spreadsheets. Xero costs $50pm for up to two users, $100pm for unlimited users. So that equates to either $600 or $1200 per year. That’s a lot of money for small businesses. As a rough comparison, MYOB or Quickbooks will set you back between $300 and $500 – one off.

I personally signed up for Xero because it can automatically pull my bank transactions from ASB – that in itself will save me an hour a month, so the $50 per month just about stacks up. Our company is also about building quality web apps, and Xero is a shining example to aspire to.

They’ve assembled a rock-star team which no doubt can deliver the goods, but rock star teams don’t come cheap. And whilst they have a couple of uber-star investors onboard, which will raise huge interest, it’s not as if they are short on cash.

I’m gonna keep a close eye on this one, and its going to be interesting to see the coverage over the next few weeks. Xero themselves acknowledge that this is indeed a “start-up” investment, and reward rarely comes without risk.

I’ll be keeping my fingers crossed for them, as I think it could be a great success story, and will likely inject further belief into the local IT community – which is always a good thing.

Will I invest? That’d be telling 🙂

Coverage:

Update

Tim makes some good comment on his Silicon Welly blog.  There are indeed some big name directors onboard, and this does provide a) a big vote of confidence and b) the right kind of expertise needed.

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4 Responses to “Xero IPO”

  1. benkepes Says:

    Thanks for the link-back
    I to will be keeping my investment thoughts under my hat!

  2. benkepes Says:

    oops – I’m normally a pedant about grammar

    I too, will be keeping my investment thoughts under my hat

    😉

  3. Graham Says:

    ~ just wanting some feedback on Xero from someone who has used it for a while…

    How is it, still stuck with it?


  4. I follow your posts for quite a long time and must tell that your articles always prove to be of a high value and quality for readers.


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