Xero Among Cloud Top 500

Xero Strengths, Domain Expertise, and Key Differentiators

Xero provides cloud-based accounting software for small and medium-sized businesses. Its products are sold by subscription, based on the type and number of company entities managed by the subscriber.

Today, Xero provides its 3+ million subscribers with connections to a thriving ecosystem of 800+ third-party apps and 200+ connections to banks and financial service providers. This provides more choice than ever for small businesses to use the best applications connected to Xero that meet their unique requirements.

Partners include organisations like Stripe, Transferwise, Go-Cardless, Google, Microsoft, Mailchimp and HubSpot. Xero is continuing to invest in application programming interface (API) improvements to fuel the growth of its developer ecosystem and supports tighter integrations with strategic partners.

Xero Recent Developments

In 2021, Xero acquired Tickstar, which provides e-invoicing infrastructure and expertise to governments and businesses around the world. This acquisition will provide Xero with continued access to e-invoicing networks, while providing Tickstar with additional resources to service its existing customers and acquire new ones.

Xero launched Analytics Plus, AI-powered forecasting suite, which now includes more advanced insights about cash flow, through pattern matching and predictive algorithms

In recognition of the current challenges and opportunities some of the smallest businesses are facing right now, the company redesigned its Starter plan (or Early plan in the US), which is tailored for new businesses and sole traders. This includes removing the limits on bank reconciliation and increasing the invoice limit to 20 per month. That’s approximately one per business day. The new plan will include the same powerful features existing Xero Starter plan users enjoy every day, including Hubdoc for automated document collection and management.

Xero Projects has a new profitability dashboard that provides small businesses with an easier way to see and manage the profitability of each project. The dashboard shows the total profit margin, all work invoiced and costs associated with the project, and highlights any outstanding invoices.

Xero will also extend availability of its existing insights tools to all business edition customers to help them manage cash flow at crucial times. The short-term cash flow tool allows businesses to forecast their bank balance for the next 30 days based on their existing bills and invoices, while business snapshot gives accountants and bookkeepers high-level insights into critical business metrics at a glance.

Unveiling its next generation practice vision At Xero On Air, the company unveiled its next generation practice vision, a reimagining of the practice toolkit that gives accounts and bookkeepers a unified experience to onboard, collaborate and manage client work in the cloud.

Under this vision, Xero HQ will transform a powerful, purpose-built Customer Relationship Management system for accountants and bookkeepers that collects and integrates all relevant client information in one place, making it easier to find information and get client work done. We’re also bringing our tools into a single interface, removing the need for multiple logins.

In the short term, Xero releasing new features sooner that make it easier to win new clients through the Advisor Director, onboard clients with customised templates, sign documents and automatically synchronise data between Xero and Xero Practice Manager.

Xero Mergers and Acquisitions (M&A) Activities

In August 2020, Xero acquired Waddle, a cloud-based invoice lending platform. Waddle helps connect small businesses to invoice finance, a form of secured lending that relies on a business’s unpaid invoices. The acquisition of Waddle is an important step in its strategy to grow Xero’s small business platform and to help its customers better manage cash flow and gain access to working capital as needed.

Waddle’s lending platform has the potential to enable a wide range of banks, fintech, and other lenders to better support small business financial needs.

In December 2018, Xero acquired two companies. The first company was Instafile, a tax filing and accounts production solution that extends Xero's existing connectivity to the UK's HMRC and Companies House and the second was Cicerone Limited.

In August 2018 Xero acquired Hubdoc, a data capture solution that helps accountants, bookkeepers, and small businesses to streamline administrative tasks such as financial document collection and data entry. Founded in 2011, Hubdoc is headquartered in Toronto, Canada, currently serving customers in the US, Canada, UK, and Australia. Hubdoc will continue to operate on a stand-alone basis within Xero, led by co-founders and co-CEOs Jamie McDonald and Jamie Shulman. Hubdoc has been a Xero ecosystem partner since 2014. Hubdoc automatically collects bank statements, bills, and receipts from more than 700 financial institutions, utilities, telecom providers, and suppliers, delivering streamlined data capture and seamless integration with accounting solutions such as Xero.

This data capture capability is a key element of Xero’s code-free accounting strategy, which enables small businesses and their advisors to focus on growing their businesses. Hubdoc will continue to be sold separately, and available to non-Xero customers, maintaining its current business model. Over the longer-term, customers can expect to see a deeper integration between Hubdoc and the Xero platform, servicing customers globally. Xero remains fully committed to its open ecosystem strategy and Xero customers will continue to have access to the full range of more than 700 apps that connect with Xero."

Xero Customers in ARTW Customer Database

Leveraging a rigorous data-centric research methodology, APPS RUN THE WORLD asks the simple question: Who’s buying Xero applications and why? And we provide the answers – supported by decades of research – to our clients around the world. Our Customer database has over 100 data fields that detail company usage of Xero and other enterprise apps by function, customer size, industry, location, implementation status, partner involvement, Line of Business Key Stakeholders and IT decision makers contact details. List of Verified Xero, customers.

Xero Key Enterprise and Cloud Applications

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Xero Direct vs Indirect sales

Xero Customers - Breakdown by Geo, Size, Vertical and Product

List of Verified Xero Customers

No. of Xero Customers: 3 million

No. of Xero Enterprise Applications Customers: 3 million

No. of Xero Cloud Customers: 3 million

No. of Xero Cloud Subscribers: 3271 Milion

Xero is used in over 180 countries by 3M paying subscribers and integrates with 800+ add-on apps and 200+ banks and financial services providers. Following strong subscriber growth over the past 12 months, Xero is small business cloud accounting software in Australia, New Zealand, and the United Kingdom, based on the number of subscriptions. They have also made good progress in the competitive United States market where the accounting industry is early in its migration to cloud technologies.

Xero Market Opportunities, M&A and Geo Expansions

In 2021, Xero acquired Planday, a workforce management platform. Planday integrates with Xero, other accounting solutions and third-party workforce-related apps, to deliver a real-time view of staffing needs and payroll costs, alongside key business performance metrics. Planday helps to address the changing nature of work, with employers and employees increasingly adopting flexible arrangements.

In July 2018 Xero partnered with Gusto for its small business and accountant customers in the U.S. The strategic partnership brings together the power of the company’s world-class accounting platform with Gusto’s innovative full-service payroll service and will allow Xero to deliver full-service payroll in all 50 U.S.states for the first time. Xero’s U.S. subscribers will have access to the following benefits of Gusto, running payroll completely online with software and design, data synced, and automated with Xero. Gusto also integrates with workers’ compensation, benefits like health insurance or 401(k) retirement plans, and human resources, providing compliance, ease, and flexibility.

Xero acquired the Seattle-based cloud accounting and payroll company Monchilla for $4.13 million to speed up its growth in the USA. Xero raised 110 million and hired the new U.S. president to speed up its USA expansion. The Company continues to pursue opportunities to meet the needs of small businesses worldwide through partnerships, acquisitions, and its ecosystem.

Xero Risks and Challenges

The potential for adoption in United States, along with increasing government initiatives to digitise tax, presents a major opportunity. The US is different because of the multiple states. The comapny has to be smart about approaching it. It can be a combination of building, partnering and acquiring.

Xero has a pretty big challenge that is, to take on the mighty Intuit, Sage, and the other smaller vendors such as MYOB, Saasu, and Freshbooks. But so far, the company is doing quite well with its fight. Now even though Xero has made lots of headway against Intuit, there is still much to do. But then again, QuickBooks has been around for several decades.

Now with 3 million subscribers, Xero has reached a major milestone for a Cloud vendor that has defied the odds by competing against on-premise incumbents that for years have had a lock on the SMB market with millions of customers.

Xero Ecosystem, Partners, Resellers and SI

Xero offers an ecosystem of over 1,000 third-party apps and 300 plus connections to banks and other financial partners.

In November 2021, Xero partnered with Shopify to help better support small businesses. By joining the Shopify Plus Certified App Program (PCAP), Xero has entered into a group of partners that supports the advanced needs of Shopify's global merchants.

In July 2021, Xero welcomed DFK as a Global Partner, bringing joint value to member firms. Xero will become the platform of choice for DFK’s member firms and their small to medium business clients.

The Xero ecosystem is a network of innovation, powered by 70,000 users of its open API and developer tools, 200+ connections to banks and financial service providers, and 800+ third party apps. Xero’s app marketplace is where small businesses and their advisors can access these 800+ apps to solve their niche business problems. With apps that support everything from inventory and logistics to point of sale and project management, businesses have an array of options to build a customised experience.

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Research Methodology

Data used in research reports are derived from publicly available documents, continuous surveys of applications vendors, customers, resellers, Independent Software Vendors, systems integrators and other verifiable sources.

Vendor shares and market forecast results are based on a combination of existing databases as well as demand side and supply side research conducted throughout the year with validation from vendors, customers, channel partners and documentations such as earnings releases and 10Q and 10K filings, vertical industry studies, regional and country-level statistics from public and private institutions(i.e. colleges, universities, government agencies and trade associations).

For additional information on our methodologies, here's the link:

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