Xero surpasses one million subscribers

Xero surpasses one million subscribers

Doubling subscribers in less than two years,
Xero has organically grown from the market challenger to a global accounting
platform leader

WELLINGTON, 30 March, 2017 – Xero Limited (NZX: XRO; ASX: XRO) today
announced it recently surpassed one million subscribers* worldwide on its
global cloud accounting platform.

Xero has doubled subscriber numbers in less
than two years and has quickly grown to become a global accounting platform
leader, adding nearly 300,000 subscribers in the last year alone.

“Five-and-a-half years ago, at 50,000
subscribers, we asked shareholders to imagine our business at a million
subscribers,” Xero CEO and Founder, Rod Drury said. “We invested for the long
term to build a business and ecosystem to achieve those numbers. It’s very satisfying
to deliver on that promise.

“Starting around ten years ago with our first
lines of code, it’s amazing to see the global community who have built
businesses on our platform.  We thank our accounting and bookkeeping
partners, small businesses customers, our Xero people and investors who have
been cloud pioneers, reinventing how small businesses work in a digitally
connected world,” Drury said.

Accounting has gone global

With subscribers in more than 180 countries,
many are now doing business across borders – not just in their home countries.
Cloud technology has reshaped trade over the last decade, and we’re seeing the
rise of truly global small businesses that have grown up without the need to
operate within the confines of a single country’s borders.

“Only a global platform – on a single global
code base like Xero – can offer the opportunity for small businesses and their
advisors to expand their businesses offshore, connect to banks in multiple
countries and use Xero’s technology and payment partnerships with Google,
Apple, Square, Paypal, Stripe and others to do business seamlessly all over the
world. It sets in motion a global network effect as small businesses expand
their trade between countries,” Drury said.

“Many of the 100,000 business advisors who
work with their clients on Xero have small businesses that import or export.
The increasingly global nature of small business means that, like Airbnb,
Amazon, and Facebook, accounting platforms must also be global. 
Surpassing one million subscribers positions us as a leading global cloud
accounting platform. We’re just getting started.”

Ready for the AI generation

The next wave of accounting innovation is
Artificial Intelligence (AI) and machine learning. Xero completed its complex
migration to Amazon Web Services, consolidating the platform on a powerful set
of technologies that help unlock the power of our vast connections and data. In
the last 12 months, Xero has processed more than $1.2 trillion of global
economic activity, giving it a unique and high-value dataset to drive insights
and  machine learning.

Xero’s machine learning system can now code
invoices for small businesses, categorize expenses and recommend accounting
practices to a potential client, automating the busy work of accounting, freeing
advisors up to focus on providing clients with expert advice.

“Machine learning and automation will open up
the next phase of innovation in accounting, driving a transition in the
industry bigger than the move to the cloud did ten years ago. With technology
doing more of the time-consuming, data entry work, we will see more accountants
take on advisory and virtual CFO roles within the small businesses they
support,” Drury said. “Rather than just keying in data, they’re interpreting
the output – and with the power of machine learning, they’ll provide higher
level advisory services that help clients feel in control of their finances
which is a key human function that cannot be replaced.”

Cloud innovation drove Xero’s rise to help
more than one million subscribers. Machine learning and automation will be the
wave which enables us to scale to service millions of small businesses and
advisors around the world.

“Xero has
evolved from the market challenger into one of the leading global cloud
accounting platforms. The first challenger to surpass one million subscribers
is a significant milestone for cloud accounting and validation for an industry
which didn’t exist a decade ago. Together with our accounting partners and
small business owners, we’re so excited to lead the industry innovation
charge,” Drury said.

*In line with its previous definition, Xero
measures subscribers as each unique subscription to a Xero offered product that
is purchased by an accounting partner or an end user and which is, or is
available to be, deployed.