Xero, the company trying to build a global accounting software business from New Zealand, said Sam Morgan is increasing his stake in the company.
Mr Morgan has agreed with founders Rod Drury and Hamish Edwards and chief operating officer, Alastair Grigg, to buy approximately 1.4 million shares from them at $1.45 per share, chairman Phil Norman told shareholders at the annual meeting in Wellington today.
The transaction was supported by the board. The share price closed at $1.41 today (NZX: XRO).
"We are delighted that Sam has chosen to increase his shareholding, which following the transfer will stand at 4.86 percent," Mr Norman said.
Mr Morgan, who stood for re-election as a director at the meeting, started his career at Deloitte Consulting and is best known for founding online auction website TradeMe, which sold for $750 million.
He also built a successful online dating and friend reuniting businesses in New Zealand, Australia and Canada.
His current holdings include a number of other successful web businesses, including Visfleet and Sonar6. He is also a director of Fairfax Media (Australia), Gareth Morgan Investments, Pacific Fibre (where Mr Drury is a co-investor) and Tourism New Zealand.
Mr Norman said Xero now had in excess of 22,000 paying business customers. It announced it reached the milestone of 20,000 customers in June.
Xero's products were being considered as mainstream, Mr Norman said.
He said building a global software company from New Zealand had required a mammoth effort and the company was on track to reach break-even in the second half of calendar 2011.
It reported a $8.45 million loss in the year to March 31.
Mr Norman was also standing for re-election at the meeting. He is managing director of Nortek Management Services Ltd, a boutique business advisory firm and has more than 30 years experience in the information and communication technology sector.
Xero was founded in July 2006 by successful technology entrepreneur Mr Drury and specialist small business accountant Mr Edwards.
"Another key part of Xero's strategy has been to have the capital to do things properly. This is why Xero listed in mid 2007 within a year of being founded, raising $15 million to establish the business and create its initial product suite, following which an additional $29 million was raised in a second round in April 2009 to fund the next expansion phase," Mr Norman said.