World’s Number One Innovator: Xero
Influential US business media Forbes has declared New Zealand start-up Xero as the world’s most innovative growth company, beating out much bigger and well-established companies, ASOS and NetSuite.
The Wellington-based cloud accounting firm, which has yet to turn a profit, was bestowed with an “innovation premium” of 91.7%, comfortably ahead of NetSuite’s 89%.
“The innovation premium is a measure of how much investors have bid up the stock price of a company above the value of its existing business based on expectations of future innovative results,” explains Forbes.
The win is a coup for Xero, which is rapidly expanding its US operations, where accounting software services is dominated by Intuit (Quickbooks), as the Forbes endorsement will add impetus to its marketing in the important territory.
Five year average sales of growth of 210.2% clearly signals Xero’s breakneck acceleration – and it is yet to hit the point of inflection, where revenue is still growing but at a slower rate.
Xero investors are a who’s who of New Zealand, Australian and US innovation, including TradeMe founder Sam Morgan and his father Gareth, MYOB founder Craig Winkler, former Kiwiback chief executive Sam Knowles and, most importantly, Paypal founder and Facebook investor, Peter Thiel.
Morgan Snr, previously critical of the company’s growth over profit strategy, has gone on the record as saying that if Xero becomes a global platform, he will treat company founder Rod Drury as a God.
Given the Forbes accolade, Drury’s days as a mere mortal may be numbered.