25 Feb 2015

Xero raises Silicon Valley cash

4:21 pm on 25 February 2015

Xero has raised $147.2 million of fresh capital from a Silicon Valley-based venture capital firm.

One of the investors, Matrix Capital Management, which already owns nearly 10 percent, is contributing more than $14 million of the new money.

Xero said that will take its cash balance to about $285 million.

Investors have been waiting for the software company to raise more funds and the latest fund raising is likely to be perceived as an endorsement of Xero's plans to expand in the United States.

Xero's shares jumped more than 27 percent to $23.20 on Wednesday morning trading.

Last week, the stock exchange questioned Xero after its shares suddenly shot up nearly 16 percent, but Xero said it was complying with the NZX's continuous disclosure rules.

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