Xero bets on Denver to develop US business

Tuesday 1st November 2016

Xero is betting on Denver to be the cornerstone of its North American operations as it seeks to develop a core team to service the world's largest economy.

The Wellington-based accounting software developer's incoming Americas president Keri Gohman will be based in the Colorado state capital when she starts in December as Xero focuses on building out its North American operations. The company currently employs about 100 people in Denver in its sales and customer experience teams, and chief executive Rod Drury expects that will expand to "a few hundred" as he tries to build a mass of people in a more affordable city than San Francisco, where its US leadership team has previously been based.

Drury said San Francisco was a "great place to get started" and the first port of call to raise capital, but as the company moves into an "operational phase" he had to weigh up whether to stay in that city or move.

"It's difficult to grow this business in San Francisco," Drury said. "This change made sense, so we started looking for a long-term US leader, and finding somebody happy to move to Denver was a key criteria."

Xero will continue to have a presence in the North California city, which will be supported by the Denver base alongside its operations in Austin, Texas, and development teams in Seattle and New York.

As a result of the move from San Francisco, existing US head Russ Fujioka elected to leave Xero at the end of the year.

The company overhauled its management structure to have country managers report directly to Drury, which he said reflected that they were developing into sizeable businesses in their own right. The shake-up also disestablished Xero's chief marketing and revenue officer role, prompting Andy Lark's exit from the company, while the creation of chief people officer and chief accounting officer roles freed up chief financial officer Sankar Narayan to expand his focus to driving the operation and global revenue.

Xero had 62,000 customers in North America as at March 31, and a total of 717,000 global customers. It will update those figures when it reports its first-half earnings later this week.

"I'm comfortable with the success we're having and we'll talk more about it on Thursday," Drury said.

Xero shares fell 1.9 percent yesterday to $17.50, having dropped 9.9 percent this year.

BusinessDesk.co.nz

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