Xero nets $413m with notes

CLOUD accounting outfit Xero has raised $413 million from investors as it beefs up for further acquisitions.

Xero, which is listed on the Australian Securities Exchange, raised the money by issuing $US300 million in unsecured convertible notes through the Singapore stock market.

Convertible notes are a form of short-term debt that converts into equity – investors which have effectively lent money to Xero will be paid back via stock in the company.

Chief executive Steve Vamos said it was the first time a local technology company, not listed in the US, had decided to pursue this style of capital raising.

“This is quite common in the US,” Mr Vamos said.

“As a high-growth company, we wanted to raise capital without any dilution of equity — it helps us make smart investment and gives us the balance we are seeking in terms of scaling the business.”