NZ firm represents billion-dollar Silicon Valley venture capitalist

by Hannah Norton18 Mar 2015
A major New Zealand law firm is representing a billion-dollar Silicon Valley-based private equity business in its first investment in New Zealand, worth NZ$132.9m.

Simpson Grierson partner Michael Pollard and senior associate Andrew Matthews have acted for US private equity firm Accel Partners on its NZ$132.9million private placement investment in Xero, which is expected to close this week.

“We're delighted to be involved Accel's first investment into New Zealand,” Pollard said.

 “Its investment in Xero will assist the growth and expansion of one of New Zealand's most innovative companies.”

Xero is an online accounting software company that is listed on both the NZX and the ASX. Acting for Xero was the company’s general counsel Matt Vaughan.

“We welcome the Accel Funds as strategic investors in Xero, and are delighted with Matrix’s continued support,” Xero chief executive Rod Drury said.

“Our ability to attract capital and leadership of this caliber is testament to our success and our potential to become the small business SaaS (Software as a Service) platform of choice for entrepreneurs around the world.”

Drury told NZLawyer Xero had taken part in a number of deals recently which involved referring overseas investors to local firms. Some of the firms he’d worked with included Chapman Tripp, Simpson Grierson and Bell Gully.

“I think we’ve drummed up a lot of business – they should invite me to more of their Christmas parties,” he laughed.

The company announced Accel’s investment last Wednesday, in conjunction with the announcement of current shareholder Matrix Capital Management’s commitment to invest an additional NZ$14.3million, bringing the pool of new funds to $147.2million.

Xero planned to use the proceeds from the issue of shares to fuel innovation and growth globally, and to also specifically drive the company’s growth in the United States and United Kingdom.

Accel Partners has helped entrepreneurs build over 300 successful technology companies across the world – including the likes of Facebook, Spotify, Dropbox and Etsy – and dealt with billions of dollars’ worth of capital from its offices in Silicon Valley (Palo Alto, California), New York City, London, India and China.

Accel will invest the money into Xero at NZ$20 per share through a number of funds, called the Accel Funds.
The Accel Funds will receive participation rights which will allow them to take part in future placements to a percentage equal to their total stake in Xero – expected to be around 4.9percent.

The past few years have been a period of high investment into Xero with $180million of capital raised in October 2013, followed by another cash injection of $170.8million in September last year.