In 2009, Craig Winkler, the Founder of MYOB, which at the time, was a legacy small business software solution that had to be installed on a PC via CD and was a major competitor for Xero, clearly saw the opportunity and invested NZD23m in Xero. Xero is a cloud based accounting software solution for small businesses, that was the first to leverage cloud based technology to disrupt the market.
Rarely do you see the Founder invest in a disruptive competitor, but when you do, it’s a sign of the opportunity and potential that someone who intimately knows the industry sees.
By simply following Craig’s investment, investors made more than a 100x return on their investment. In 2009, Xero’s share price was approximately NZD$1 and is today AUD$150 (currencies are approximately the same).
Xero was originally listed on the New Zealand Stock Exchange (NZX) at the time in 2009, and then listed on the Australian Stock Exchange (ASX). It is now solely listed on the ASX under the ticker XRO (ASX XRO).
Craig’s investment was followed by Peter Thiel, Co-founder of PayPal and early Facebook investor, who in his personal capacity and through his Venture Capital company, Valar Ventures, invested USD3m and USD16m respectively between 2010 and 2012.
Again, if investors followed Peter’s investment into Xero, they would have made more than 50x their money!
The image below shows the share price of Xero in 2009 when it was listed on the NZX at approximately NZD$1.
Then this image shows the current price of Xero listed on the ASX at more than AUD$150.
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