Xero Grows Through International Acquisitions

According to a report published by Transparency Market Research, the global accounting software market is estimated to grow from $5.7 billion in 2017 at nearly 9% annually over the next few years to $11.8 billion by 2026. Xero (ASX: XRO) is a leading player from New Zealand, which is making its presence felt in the industry.

Xero’s Offerings

Wellington-based Xero was founded in 2006 by serial entrepreneur Rod Drury and Craig Walker. Craig Walker had worked at Drury’s earlier software development and consulting company Glazier Systems and was instrumental in spinning a new SaaS company VIATX with Drury. Since founding VIATX, both co-founders had moved onto different projects. In 2006, Walker was working as a consultant CTO for several small businesses and Drury was a Director at New Zealand’s Classified site TradeMe. It was over a social get together that Drury reached out to Walker and asked him to work with him instead to build his new business idea.

Drury wanted to build a new suite of accounting software that would be stored and delivered over the internet for small business use. In 2006, when most business owners were not comfortable with the idea of storing their financial information over the cloud, cloud computing solution was a novel idea. Craig Walker agreed to the business idea and began writing code in his dining room. As the technical framework began to grow, they added three software engineers and three designers to work on the code. They even got the book Accounting for Dummies to help the programmers understand the basic principles of accounting.

Initially, the company was known as Accounting 2.0. But no one involved was happy with the name. The decimal in the name made it difficult to get a domain name as well. Drury wanted a four-letter name and one that would carry significance for an accounting software. They came up with Zero, but the zero.com domain name was being sold for $100,000. A friend suggested going with Xero instead, but Xero.com was a fan site for a music group Linkin Park. After a few rounds of negotiation, the Linkin Park fan was willing to sell the domain for $20,000 and a fully paid business class trip from New York to New Zealand. Thus, Xero was born.

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