Xero MD Chris Ridd is touring with a national roadshow, visiting 20 cities over three weeks .
Marianna Papadakis
“I’m a tragic for 70s rock hits, but I don’t get a choice what we play around the office,” Xero managing director Chris Ridd says of the booming cloud software player’s Friday’s office band jam.
“You wouldn’t think accountants and bookkeepers would jump around and be rock n’ roll stars, but they are, it’s scary at times. For my sins, I use that influence at Xero events.”
Taking the rock analogy further, Ridd is touring with a national roadshow to 20 cities over three weeks, visiting 5500 accountants and bookkeepers, half of whom were already clients, along with nine of Australia’s top 10 accounting firms.
He has a big recent success story to sell, with the company’s shares having gone through the roof this year.
Ridd, 46, is celebrating his third year at Xero this week, after coming to the company from Microsoft where he spent 15 years including as the manager of its business applications division.
The husband and father of three children did a bachelor of business in economics and marketing and started studying accounting before deciding his interest truly lay in technology.
The start-up had seven staff when he arrived and now has 115, having hired 63 people in the past 12 months. It has plans to take on a further 30 in the next few months, doubling numbers in a year.
Ridd says the company is concentrating on evolving its core accounting platform for small business – using the innovation of third party developers – as well as focusing on its new tax products and building its software development resources.
Ridd says that when he first started at Xero, the core product had 25 add-on applications, now there are more than 300.
Speaking on the way to the Sunshine Coast, Ridd says innovation can be likened to musical improvisation, and has been the key to Xero’s recent rapid growth. He says the company has been aided by a lack of speed among rivals. such as MYOB in Australia, Intuit in the United States, and Sage in the United Kingdom, in a push towards online and multi-device offerings in the accounting system space.
Xero garnered $180 million in a capital raising in Australia last year, allowing it to pursue global growth aggressively, particularly in the US.
“A nimble well-funded start-up can disrupt those markets, and we are in a much better financial position than Australian competitors, like MYOB, that are struggling with debt,” Ridd says. “We’re not just selling to the 2.1 small businesses in Australia, there’s five times that in the UK and 29 million in the US. That’s why there’s so much interest in Xero.”
Financial markets and technology analysts are awaiting the company’s revenue results at the end of the end of the New Zealand financial year in March to gauge how long the good times will last. The share price has risen to $37.30 since listing on the Australian Securities Exchange in November 2012, at an opening price of $4.50. The New Zealand-based company was already listed on the New Zealand Stock Exchange and maintains a dual listing. Ridd rebuffed concerns about overvaluation, saying: “We’re making substantial investments ahead of revenue numbers, it’s the time is right to make strategic investments and aggressively expand in the US, we are confident the opportunity is there and the market is responding to that.”
The company is based in New Zealand and was founded in 2006 by Wellington-born technology entrepreneur Rod Drury.
“Innovation is key, we’re putting out new releases for our core product every three to four weeks.
At end of October, Xero had 79,100 customers in Australia, but Ridd says it is signing up about 300 new ones every day and is aiming for a million globally in the next five years.
With 15,000 bookkeepers, 9500 accountants and 15,000 financial advisors in Australia, Ridd says there is plenty of room for growth.
“It’s innovation that small business is craving and they are moving to cloud technologies in droves, and that’s what’s driving our growth,” he says.