Xero Update

October 1st, 2009 at 12:24 pm by David Farrar

Rod Drury has blogged:

We put out our first half operating update this morning.

Xero Operating Update to 30 September 2009

has over 12,000 customers and now has customers in 50 countries. How cool is that!

Very cool. I say that as a user and shareholder. I also calculate $600/year income per customer and estimate income is now around $7 million a year.

Just 12 months ago we had 2200 customers. As you can imagine there has been a huge amount of work going on behind the scenes to ensure that we scale all aspects of the business to deal with this level of growth. With the additional capital raised in May we’ve been able to gas up on development as well as build out our sales team with senior people in NZ, the UK and Australia.

Wow that is great growth.

We’re delighted we’ve been able to lock in our growth rate after our seasonal high of March and feel that we’ve put the foundations in place for the next step up.

Selling software to the vast and fragmented small business market is really hard. There are few companies who have cracked it. The way people are using the web is evolving quickly and we’re all just starting to understand the impact of social media. Over the last half we’ve experimented with a number of marketing and sales approaches to find what works in our space and in each country. I’ve really enjoyed this stage of the business and I think we’re evolving sales models and processes that work. There is no doubt we are still learning.

Our entire team have worked really, really hard over the last half. There is a buzz inside Xero as all the hard work we’ve been doing is beginning to pay off. We just love the feedback and hearing how people enjoy using our software.

Thank you to our valuable customers and partners. We really appreciate your support and the great ideas and feedback. Our list of things to do has not got any smaller. And thank you again to our shareholders who have given us the opportunity to build a company that we all at Xero are proud of.

For those interested, there’s a thread from earlier this week on Xero’s new pricing plans, and some Q&A with staff.

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6 Responses to “Xero Update”

  1. Le Grande Fromage (145 comments) says:

    Nice work DPF. I haven’t seen a blatant pump and dump manoeuvre like this for a long time. If I were you when it hits $1.50 it is time to dump.

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  2. Victor (7 comments) says:

    Which leaves it at 15x prospective sales .. Be careful on this DPF, it is outside your area of expertise, and you do not want to go the way of Henry Blogett . . . You disclose you are a shareholder, but you are acting as a tout on this one. Pretty suspect, particularly as stock analysis is not part of your trade. . .

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  3. malcolm (1,952 comments) says:

    For an investor they’re a gamble, but their customer growth is very impressive and I hear good things about the product.

    Very cool. I say that as a user and shareholder. I also calculate $600/year income per customer and estimate income is now around $7 million a year.

    Hang on. In their March 2009 report they quoted a figure of $33 income per user, per month. Quite a bit less than the $49 per month base price would suggest and a little bit less again than DPF’s $600/year.

    Still, I’m considering a little punt…

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  4. malcolm (1,952 comments) says:

    DPF, I’m probably a bit slow, but when you tag a posting as “paid advertisement” does that mean you’re being paid to run that posting?

    If so, were you also paid to misquote their average earnings per user as $600/year rather than the real figure which is closer to $400/year? :-)

    I rarely notice the tags. I shall have to pay more attention.

    [DPF: I simply multiplied $49 x 12 as the monthly fee. Any assumptions are mine. Very occasionally an advertiser asks for a blog post to accompany it, to allow discussion and feedback. I accept those where I am comfortable endorsing the product]

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  5. malcolm (1,952 comments) says:

    Thanks DPF. Fair enough. My posting probably had the wrong tone – was just meant as a gentle poke.

    cheers

    Malcolm

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  6. Falafulu Fisi (2,179 comments) says:

    Well done to Rod and team.

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