Xero considers US call centre
Xero might seek to raise extra cash from investors to pay for a call centre in the United States' mid-west, chief executive Rod Drury today told analysts tracking the online accounting firm.
Drury signalled yesterday that the Wellington firm would further step up its investment drive to become the leading global provider of cloud-based accounting software, while revealing a near doubling of its interim net loss to $7 million and forecasting a bigger second-half loss to come.
"If we suddenly found the US started to take off, then we might want to put a call centre in the mid-west that just dialled for dollars'," he said, explaining while Xero was commenting on its ability to raise further capital while it still had more than $30m of cash on hand.
Drury ended the conference call with analysts by appealing for them to help sell Xero's equity-fuelled growth strategy to investors.
"We are in a pretty unsophisticated market in New Zealand, so if you can give us some 'air cover' on the loss that would be much appreciated," he said.
Drury said interest in cloud-computing from would-be investors overseas would make it easy for the NZX and ASX-listed firm to raise more capital at "a pretty good valuation" if required. Even without the call centre, Xero plans to take on about another 100 staff.
Xero's shares, which had been up more than $1 on the month, edged down 12 cents to $6.24 yesterday and they shed a further 16c cents in trading this morning.
Drury told BusinessDay yesterday that Xero was still doing the groundwork in the US market, which currently accounts for less than $1.2m on of its sales, by "winning over influencers" and adding features for the local market. "We haven't completely put our foot on the throttle in the US yet. But the buzz about Xero feels quite good. We are now being presented as the real challenger to [online accounting market leader] Intuit in the US," he said.
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