Rod Drury: Why Xero is leaving the NZX

Xero's new five storey Wellington headquarters. Photo / Supplied

Xero's stock exchange listing in 2007 created a platform for our early success and the ability to deliver on our strategy so far to build a significant global business from New Zealand.

We feel strongly the pathway we've created is one other New Zealand tech companies should emulate - list locally to establish a track record and form vital long term relationships, and interact with the supportive local market while you build scale and credibility.

Since our initial public offering in 2007 we have brought Silicon Valley to New Zealand's capital markets, adding strategic investors to our register like Sequoia, Accel, TCV and many other US tech funds. Some of our investors subsequently invested in other New Zealand companies.

We have been able to showcase New Zealand technology globally and proven the NZX can be a great incubator for technology businesses. The early support we received through our listing allowed Xero to expand and contribute significantly to the New Zealand economy, with more than 1,000 people now employed here and strong New Zealand hiring growth targeted.

Xero has been dual listed across NZX and ASX since November 2012. Our decision to consolidate the two listings onto the ASX and delist from NZX sets a new platform to support the next phase of our long term future growth.

This is the logical next stage of our strategy to ensure that we can attract strategic global growth investors who own significant stakes in other global platforms that we now consider peers, and who are under-represented on our share register currently.

The move to sole ASX listing is a sign of Xero's success on the NZX and testament to the NZX as a strong proposition for growing technology companies. For us, we believe our next growth phase suits a sole ASX listing.

Xero's listing on the NZX was a new playbook for New Zealand companies. It was novel at the time, and the vision and support of Rob Cameron at Cameron Partners and Scott St John then at First NZ Capital helped us establish the platform we needed to build foundations for scale.

Xero was a start up, birthed completely in public. We listed with 100 customers and our first year of revenue was just over $100,000. From that small beginning we have tried to lead by example, with clear reporting and open and well attended shareholder events. We have openly communicated our strategy and made ourselves available for questions. We are one of New Zealand's most commented on companies and enjoy the many robust discussions and feedback.

With 10 years' experience we learned our NZX listing strategy took few, if any, options off the table including our latest move to consolidate on ASX.

By contrast we have seen other companies struggle by skipping the NZX, arriving in Australia and just not being noticed. Xero, with more than 500,000 subscribers in Australia, facilitating payments and interactions with millions of Australians every day, is already a recognised brand, so is better positioned than other New Zealand tech companies in our neighbouring market.

Our strategy and execution has delivered outstanding returns to those who have supported our dream from the beginning. This move to consolidate our listing is a necessary next step in fuelling the next phase of this growth to enable us to continue delivering for shareholders.

Xero is an aspirational New Zealand business with an unparalleled global opportunity and remains New Zealand headquartered and domiciled. The reasons that are compelling for us to continue building our workforce in New Zealand do not change as we consolidate our shares to a sole ASX listing.

However, while more than half of our 1,800 people who are based across 20 international offices are in New Zealand, around 80% of our revenue now comes from outside New Zealand. Our 1.2 million subscribers are from 180 countries and our leadership team is truly global.

We've moved on from simple accounting software that we made in 2007; we're now a global business platform and community. We have enormous aspirations in international markets not dissimilar to tech giants you think of like Amazon and Google.

We are committed to building one of the greatest tech companies on the planet and our people arrive every day with a passion to make a difference and deliver on the promise.

We have a clear plan and we are executing strongly on it, as evidenced by our recent financial results. We expect to continue growing for many years to come; the opportunities ahead of us are boundless.

The past 10 years have been successful and as Xero, a New Zealand company, moves into its next chapter, we hope all of New Zealand remains with us as we aim to achieve something truly great on the global stage.

- Rod Drury is the founder and chief executive of Xero.