Founder Rod Drury sold his previous company, AfterMail, to Quest Software in 2006 and used the proceeds to help launch Xero later that year. The company then raised about NZ$15 million via an IPO on the NZX in 2007 — an unusually early listing — and continued to attract follow-on investment as it scaled.

Initial customers were small businesses adopting browser-based accounting. Over time, Xero discovered that accountants were a powerful distribution channel and became central to growth.

Startup Rollercoaster: Xero

The Spark – Cloud Before “Cloud”

• Founders Rod Drury & Hamish Edwards were frustrated with clunky desktop accounting.
• Their vision in 2006: simple, browser-based accounting software accessible anywhere.

The Peak – Oxygen via IPO

• With venture dollars scarce, Xero listed on the NZX in 2007.
• Raised NZ$15m despite very limited early revenue and only a small customer base.
• First product focused on invoicing and daily bank reconciliation.

The Drop – Public Scrutiny, Tiny Base

• Media and investors doubted the viability of a listed company with negligible revenue.
• Customer numbers were tiny; every new subscriber felt like a door-to-door win.

The Reset – Find the Multipliers

• Learned that accountants could be a key distribution channel.
• Began targeting accountants, who then brought their small-business clients onto Xero.
• Within a few years, referrals from accountants became a major source of new signups.

The Discipline – Keep Credibility, Keep Fuel

• Kept refining invoicing and bank reconciliation as proof of value.
• Raised follow-on capital from aligned investors, including MYOB founder Craig Winkler.

The Climb – Base of True Believers

• IPO funds bought the time they needed to grow.
• The accountant channel created the first reliable stream of customers.
• By the end of the “messy middle,” Xero had a foundation to expand globally.

Learn More

• https://companyresearch.nzx.com/announcements/attachments/56711
• https://www.nzherald.co.nz/business/xero-raises-15m-but-falls-short-of-target/TYF6BTMVOZPTK3ANEGJETWU66A
• https://www.nzherald.co.nz/business/brian-gaynor-xero-gives-business-lesson-in-ipo-boldness/MJ6EPPNIS4XFWGEZ4X6TTLMYHE
• https://blog.xero.com/news-events/the-hockey-stick
• https://www.asx.com.au/blog/listed-at-asx/xero-uses-asx-to-go-global
• https://www.rnz.co.nz/news/business/263028/xero-seven-years-on-the-sharemarket

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