It is for this reason that when Xero launched in its home territory of New Zealand, the deal it had secured with a number of loal banks for auotmed bank feeds was just so game changing. Bank feeds are supremely useful, and by spending time negotiating the deal, Xero had given itself an awesome launching point. The global reality however is somewhat different, and it’s fair to say that Xero didn’t have the same success convincing banks outside of NZ to come on board, hence their decision a few years ago to use the Yodlee platform to run their bank feeds. this was a logical decision (Yodlee, now owned by Intuit, is a banking integration platform that already has thousands of banking institution integrated into it Clarification – Intuit’s DOES have a bank aggregation service through it’s acquisition of Mint but it’s not Yodlee).

However, we’re talking about money here and, as is always the case with dollars and cents, a higher degree of suspicion arose. This was especially so given the deftly overlooked fact that, by using Yodlee, a customer is potentially in breach of their banking terms and conditions. This is due to the fact that to use Yodlee, internet banking login details need to be given by the customer to the Yodlee platform – a fact which contravenes many internet banking Terms of Agreement.

But time moved on and, despite some concerns in the odd online forum, customers kept signing up, and enjoying the benefits that automated bank feeds can bring. Which gets us to the announcement from FreeAgent that they too are using Yodlee for their bank integration. It seems to me that, regardless of the reality of a situation, there is a point at which perception gets tipped by critical mass. Clearly using Yodlee is, by the letter of the law, a contravention of a customers internet banking terms and condition. But customers seems to be deciding (either because they are ignorant of the implications, or because they are realistic about the very low levels of risk involved) that it is worth it to achieve the benefits that integration can bring.

It’s completely sub-optimal of course. In any other industry we would be incredulous that a third party site needs to be given full sign on credentials imply to perform a data transfer – but it’s symptomatic of an archaic and compliance-heavy system that doesn’t exactly encourage innovation and open mindedness. It’s a sure bet that both Xero and FreeAgent would be over the moon if a more robust integration was possible on a broad scale, but all things being equal, for the time being they’re happy leveraging the industry default, Yodlee.

And what about the customers, should they be worried? Well I’d suggest that most customers who would balk at using Yodlee for bank feeds would also balk at entrusting their accounting data to a vendor who stores their information in the cloud. But for the vast majority, perception is actuality, and the fact that many vendors, and hundred of thousands of customers have grown comfortable with Yodlee has flipped their perception to one of safety. Let’s hope that a justified perspective.

• Xero now has 100,000 paying customers – up from 45,000 at last year’s Annual Meeting
• Xero’s first 50,000 customers took 5 years to achieve, the second 50,000 was achieved in 10 months
• Annualised committed monthly revenue has risen to $34.5 million, up from $25.5 million at 31 March 2012
• 57% of Xero’s committed monthly revenue is from offshore markets, up from 51% at 31 March 2012

I’ve been critical of Xero myself in the past, and have had to suffer the displeasure of CEO Rod Drury, someone who doesn’t appreciate criticism, especially not from someone in his own country. As an aside, and having spent time talking with, and questioning other public and private technology CEOs, I would suggest that Xero needs to get a little more used to this side of public exposure – especially as it moves into the more critical US market. Anyway, that aside, the Xero numbers firmly put it into escape velocity, here follows my reasoning.

MyPOV

Many critical commenters point out that Xero has not yet reached profitability and continues to add expense to its business by way of staff hiring. This criticism is unsurprising given that Xero comes from a country which has little experience in high-growth software businesses. To understand the dynamic it is important to understand the accounting software industry where three vendors, MYOB, Sage and Intuit claim incumbency globally. Given this triumvirate, it soon becomes clear that anyone who wishes to break their hold on the market needs to scale quickly in terms of customer numbers – with 100k customers, Xero is now a recognized competitor and this leads it into the territory of the other big software trend, acquisition. This is not a “slow organic growth” opportunity – anyone wishing to challenge the incumbents (and contrary to public perception, Xero has a number of competitors in the space trying to do so – FreeAgent, KashFlow, Pearl, Zoho etc) needs to focus on rapid growth in order to both beat the other new upstarts, and gain the attention of the big boys.

When Xero was first formed, and perhaps in an attempt to appeal to parochial New Zealanders, there were many comments from the leadership about wanting to build a long term New Zealand business. This has softened recently with an admission in the past year from Drury that an acquisition would occur should the price be right (in that instance Drury suggested that his personal metric was a higher price than that garnered by TradeMe, a $700M acquisition). With the market capitalization hovering around the $600M mark now, a close to $1B takeover looks plausible. Obviously the number of potential acquirers reduces as the price goes up but both Intuit and Sage are no doubt putting a ruler across Xero as they realize their own cloud strategies are lacking. There are also a number of other vendors who sell to the SMB space who will be looking at the company – it’s worth noting that Xero competitor Outright was recently purchased by large US hosting company GoDaddy – it’s a natural fit for GoDaddy who has millions of SMB customers, so don’t look past other ISPs, general technology companies, banks or business service provision organizations taking a look at Xero. Given a very low level of liquidity for Xero (share turnover is incredibly slow and the vast majority of the stock is owned by 100 individuals) and the $1 per share initial purchase price at IPO, there could well be some pleased investors who could reap a 5x or more return in the event of an acquisition.

Xero has its share of detractors – many venting their spleens anonymously on New Zealand’s NBR website. Most of their criticism focuses on two distinct areas;

1. Criticism of immature investors who seem unwilling or unable to question the Xero strategy
2. Questions around profitability

The first criticism is probably fair. As I’ve said before most investors seem a little too eager to give Xero free realm to do as they see fit – it’s unusual for this to be the case with public companies and sometimes lulls them into a false sense of complacency which is dangerous when new markets are entered, as an aside it will be very interesting to see what happens if and when Xero lists on the Australian stock exchange where it has neither the home town advantage nor the lower maturity level of investors. I do note with interest that institutional investors are taking more of an interest in Xero now – this should improve the level of debate.

In terms of the second question about profitability – despite being a critic of growth-at-all-costs strategies – Xero is one example where the only option is to scale to size – and in doing so become a target for acquisition – this is clearly what is occurring and, given the fairly large cash reserves, and the positivity and deep-pocketedness of some of its backers (notable MYOB founder Craig Winkler, TradeMe founders Sam Morgan and Rowan Simpson and uber investor Peter Thiel), extra cash injections shouldn’t be hard to come by.

There’s no such thing as a sure bet, and I’ve had some people within the orbit of some of the incumbents in the space suggest that these players are finally going to counter Xero’s rise, in their words “the empire is about to strike back”. It’s hard however to see clearly how any of the incumbents could really do what is needed, which is to disrupt themselves before Xero (or more likely, Xero’s acquirer) does it for them. Xero looks set to make a handful of people a pretty impressive return.

Disclosure - I have consulted for MYOB and Xero and aman investor and director of Connect2Field which is 30 percent owned by Accounting software company Reckon. I am also co-founder of LiveMigrate which provides migration services from desktop accounting software to Xero. I advise many companies (either formally or informally) in the accounting software ecosystem. 

In announcing the deal, Ed Molyneux of FreeAgent says that 60mo will be their entre into the US market, and FreeAgent will leverage the knowledge about US accounting and taxation that the 60mo team have. To fund the acquisition, FreAgent tool on a round of funding from Lightbank, a Chicago based VC.

60mo has now shut down new signups and according to Molyneux is building a US-centric version of the FreeAgent application, in doing so they’re squarely going to move into competition with Xero. FreeAgent intends to backwards-integrate some of the cashflow focused functionality of 60mo into its own product.

MyPOV

This is big news for the SaaS accounting space. UK is a busy market with a number of vendors competing for market share – FreeAgent has arguably the biggest slice of the market there, it’s 20000 or so customers making it close to twice the size of Xero with other vendors such as KashFlow also in the mix. Moving to the US now makes sense since no one has yet gained any real market awareness there. While Xero has been building a local US team over the last few years, it’s safe to say that they are very much still in the initial stages and haven’t cornered the market yet. For the record – since the start of 2011, FreeAgent have grown from 4000 to 20000 customer, a growth rate that puts them at the forefront of this nascent sector – that’s an indication of the validity of their approach, regardless of the fact that ny of those customers have been gained through a low-margin partnership with a UK bank.

It will be very interesting to see the approach that FreeAgent takes with regards their go to market. Xero is strongly focused on partnerships with accountants and the like. In the UK FreeAgent has varied approach that sees them partner with a variety of organizations (accounting firms and banks for example) but is also a strong direct sales company.

FreeAgent has a rabidly supportive customer base in the UK – if they manage to have users as satisfied in the US as those across the pond, it’s going to be super-interesting to watch as they go head to head with Xero.

As I said in my post;

I do a lot of consulting work, and have significant numbers of expenses (both entered as expenses and rolled through from bank feeds) that need to be on-charged to clients. In an ideal world I’d tick a box in either the expense or the reconcile bank account window that would allow that cost to flow through to a client invoice without me having to enter it in two places..

The conversation generated a number of replies, with others suggesting workarounds or agreeing that this is a pain point. The commitment of some users was amazing with one person going so far as to design their own complex workaround with their accountant;

Set up a different Chart of Account for each client as a Current Asset – this will display your rechargeable costs as an asset on the balance sheet also removing it from your P&L. Each time you have a rechargeable cost run it through as an AP and put it against that account. You can also type into the reference box the client name for ease of reference. I apply the date of the cost on the cost date and the date of the expected invoice on the due date. When you invoice the client run a report called “Account Transactions”, selecting the relevant client account as above and the dates between which you wish to invoice. This can then be pdf’d into a nice looking document which shows all the detail in the description, from and dates boxes for every AP assigned to that account.

This pdf can then be sent in as an attachment to your regular AR invoice. Don’t enter the total into the AR as well or you will be double invoicing within Xero. When the money comes in you will then have to pay off each AP.

That’s a pretty intense piece of work for what is a very simple functional need. I’m always a little disturbed when businesses, especially small businesses who are time and resource constrained, have to design their own systems to automate what is, or at least should be a fairly standard process. I asked Xero CEO Rod Drury about this need and he agreed saying that;

[this is an] obvious hole to fill this year. Pretty easy just hasn’t hit the top of the priority list yet.

FreeAgent has beaten Xero to the mark and has rolled out its own solution to this problem. With FreeAgent’s solution, any kind of expense (out-of-pocket, bank transaction or bill) can be associated with a project (for a given client) from a super simple drop-down menu;

When a new invoice is created against that project, there is an option to automatically include any expenses associated with that

project which haven’t already been rebilled. Invoice items will be created for each expense. Once invoiced, the expenses drop out of the system and hence users have the security of knowing that expenses aren’t being charged for twice (or worse still, missed).

Aware that there are some complexities when on-charging expenses, FreeAgent users can also elect to rebill expenses with a certain markup, or at a fixed price, when they associate the expense with the project. And in a final piece of transparency assurance, FreeAgent also gives users the ability to attach copies of the relevant expense receipts when the invoice is emailed.

This is beautifully simple and fills the need of most of the users who commented on the original LinkedIn thread – it’ll be good to see Xero ramp up their development pace to accelerate the roll out of features like this.

Given the funding round it seemed timely to reflect a little on what the emergence of Wave means for the business models of companies targeting SMEs

Traditional Approaches

Led by vendors Sage, MYOB and Intuit, the traditional approach to SME accounting products is to have a dual sales strategy. These three customers all sell boxed software through traditional retail channels but also have an extensive partner network where accountants, bookkeepers and other professionals on-sell their software – either for commissions, margin or as a service backed offering. This has traditionally been an excellent approach, it leverages SMBs trusted advisers and the reach of High Street retailers.

A move to cloud computing however makes this traditional channel difficult. Retailers have difficulty understanding the concept of selling a fully virtual product (as an aside I know of some vendors who actually sell SaaS licenses in a box just to make customers feel they’re buying something real). At the same time professionals are wary for two specific reasons;

1. They tend to be highly conservative and are unwilling to move from a product they know and trust
2. Cloud has the potential to reduce the traditional areas that practitioners have been able to monetize their service, practitioners are naturally nervous about that

Traditional meets Cloud

Led by high profile vendor Xero, but with significant players including FreeAgent, KashFlow and others, this method mixes cloud software with generally traditional sales channels. While most cloud vendors forego direct retail channels, they instead replace this with sales/marketing initiatives such as those shown by Xero who has a sales/marketing partnership with telco T-Mobile. Similarly FreeAgent has a partnership that sees Barclay bank customers being offered the FreeAgent product.

This strategy has paid dividends for many vendors – Xero boasts of 50000 or so customers while the less visible vendors are all clocking up numerous wins as well.

The Brave New World

While consumers have long been accustomed to receiving free services in return for targeted offers (be it via advertising with Google or targeted services from Mint) it is relatively rare in the business world. The proposition however is obvious – micro businesses are very cash poor and a significant proportion of them are likely to be happy to receive special offers in return for free provision of services.

I was pretty impressed to see that Wave is claiming that it already counts some 75,000 small businesses as customers, this only 11 months after its launch. Clearly the average revenue per user that Wave can drive from targeted offers is likely to be less than the subscriptions charged by the paid products. As such Wave is likely to need a much higher number of customers to generate sustainable revenues. That said however I have spoken to a number of businesses who have balked at the subscriptions being charged by the other SaaS accounting vendors. This along with the fact that Wave claims 50% more customers after 11 months than Xero has gained after four or so years – speaks to the potential of an entirely new business model.

Of course that’s not to say that Wave renders the other vendors obsolete – there is undoubtedly a place for a paid SMB accounting application, however Wave, by following both a new delivery model and a new business model, is well placed to become a very important industry player.

How Will Other Vendors React?

In theory there is nothing stopping one of the other SaaS vendors from delivering a low level free product. The reality however is that the investments they’ve made in chasing a channel strategy, and the basis upon which their business has been built make this highly unlikely. Rather I would suggest that another entrant will potential emulate Wave’s approach. The barriers to entry here are low and it comes down more to the ability of a vendor to build the relationships and momentum to gain traction. Wave’s 75000 customers and significant funding round will help get it that momentum.

Ed Molyneux, FreeAgent CEO says the investment will be used primarily for design and engineering investment.

FreeAgent recently inked a high profile deal with Barclays bank that sees the bank push FreeAgent to its small business customers. While the Barclays deal is high profile – scuttlebutt says that it’s a poor commercial arrangement but if FreeAgent are able to leverage the profile of the Barclays deal and the product development that this funding round enables, they’re well placed to build a stronger position in their home market.

First up, ClearBooks more coverage of them here)

ClearBooks stole some thunder from all the other UK based players when they announced that they were the first UK based online accounting system to deliver automatic feeds (clarification, Xero has automatic bank feeds but isn’t a UK based vendor). Autobank feeds are part of the value proposition for accounting applications, for the uninitiated, instead of having to log into online banking and download a bank statement before importing it into the application, users are now welcomed every morning by their latest transactions, directly in the application dashboard. It really is an amazing timesaver and a feature that, of itself, justifies the move to SaaS.

ClearBooks have partnered with US based online banking intermediary Yodlee to enable feeds for its customers from;

• RBS
• Barclays
• Natwest
• Santander
• Lloyds
• Halifax
• Band of Scotland
• FirstDirect
• HSBC

Aside from the Yodlee integration, ClearBooks is now boasting 2000 customers overall. While straight out customer numbers aren’t overly meaningful (revenue per user being a much better measure), it is one way of measuring scale and presence within a market. ClearBooks 2000 number compares with around 10000 paying customers for competitor KashFlow.

Interestingly, Xero doesn’t break out numbers across regions, Xero seems to discount the use of regional customer number comparisons, although it must be noted that Xero themselves crow about overall global customer numbers – currently at around 45000

The second update is for LiquidAccounts (more on them here)

Liquid was the first company to be accredited by the new BASDA (Business Application Software Developers Association) Cloud Vendor Charter. One point of difference for Liquid is an import service foe Sage customers, as well as this, Liquid guarantees that you can export your data whenever you like as well (just hope your replacement vendor uses a similar data structure and allows for the importation of data).

Liquid is about to launch version 8 of their product which includes a number of additional modules including;

• Contact management
• Timesheeting
• Stock control
• Job costing
• Invoice scanning and uploading to the app

Liquid have also recently entered into a partnership with UK company formation agent @UK PLC to launch www.cloud-start-up.com, a service that brings together some basic company formation activities with a SaaS accounting application. The idea being that companies have a similar set of needs upon startup and that these can be fulfilled by one provider, this package gives UK business the ability to obtain;

• UK company formation
• A UK domain name
• Webmail Service
• A basic website
• Membership to a “business club”

It’s another take on the oft-attempted “business in a box” concept – The contention that SMBs need a packaged diverse set of services is a valid one, MYOB recently produced this video showing how New Zealand and Australian companies are using (and more importantly not using) a web presence.

It has to be said that many companies have tried these one-stop-shop solutions but they’ve tended to be two simple for businesses in the real world. That said, for companies already using the @UK PLC service, they are able to obtain LiquidAccounts at a reduced add on fee of £15 or so per month, a discount on Liquid’s usual rate. If the marketing of this alliance is anything to go by, it may well be a pretty shoddy offering – the website was full of spelling errors, there was lots of information missing, and a bunch of dead links – makes me surmise that this “partnership” was something dreamed up over a couple of pints, primarily to gain some kind of short term marketing “pop”.

In terms of market development, Liquid is saying that their;

…monthly sales have trebled since we launched v7 earlier this year.  Our client base is now in the thousands,  and we have approximately 400 accountancy partners in the UK, and over 100 resellers. Some of our resellers white-label Liquid and we have several more in the pipeline.  We have clients in approximately 10 countries including England, Ireland, Scotland, Wales, Northern Ireland, USA, Switzerland, and France.  We also have a number of accredited partners and trainers (mainly accountants) around England and Scotland.

The UK SMB Accounting space is a pretty busy place – much more so than in the US despite the differences in relative market size. It’ll be interesting to see if we see any degree of consolidation or rationalization going forwards.

I’m not going to load the company up with debt. If I take any form of loan I’d only take what I actually need, not a penny more

Which indicates a strong plan for short term expenditure.

I wasn’t previously aware of the funding round, but conversations I’ve had previously with KashFlow CEO Duane Jackson make much more sense now – Jackson alluded to some pretty herculean development initiatives as well as a significant beefing up of the executive team.

First onto what I know about the engineering. As I wrote about a couple of years ago – KashFlow is built on a relatively aged platform that makes life difficult when it comes to multi-user permissions and integrations. In the years since KashFlow was first built, much has occurred, especially in the world of APIs. KashFlow’s existing UI is a fairly classic approach towards interface’s and their existing API is a SOAP based.

KashFlow are therefore embarking on a significant project that will see the creation of a new REST API that will support XML and JSON, oAuth along with the aforementioned multiuser permissions. This project will occur whilst the old SOAP based API remains active – for the foreseeable future then KashFlow will be forced into supporting the old and the new API. This isn’t a fantastic position to be in and KashFlow intends to “encourage” partners to convert to the new REST based API.

Another part of the project is creating a UI that works entirely via the API. This is the predominant way applications are now being engineered and it means that anything that can be achieved via the UI is also exposed via the API – this gives lots of opportunities for third parties to built add on products (or even standalone UIs for that matter) to create a bigger KashFlow ecosystem. The new UI will be completely client side and created in HTML5 and Javascript – future proofing and enabling a bunch of functionality that HTML5 will introduce along with easy conversion for mobile devices and the like.

I expressed some concern to Jackson about the risk of “re writing” the back end business logic in this project. Jackson told me that most of the KashFlow business logic sits at the SQL server end so the logic remains in place thus de-risking that part of the project.

In terms of how they will progress the re-write, Jackson told me that;

Initially the new UI/API will only support, say, Invoices and Quotes. And once that’s done we can make it available along side the existing app so we have multi-user permissions just for those areas of functionality. Then as we add new areas, they become “permissionable” too. Eventually, when we have all the features in there it replaces the existing UI entirely.

It’s an ambitious project – but one that, once complete, should see KashFlow delivering a highly extensible accounting engine that should see a number of opportunities open up – especially in the ecosystem and white labeling areas.

The second big ticket item that KashFlow is investing in is the executive team. First up is their new COO, Simon Guest. Guest was former Operations Director at large UK based business software house, Iris. Guest exited IRIS after a 15 year history, and directly following a private equity buy-out – this extensive experience will help KashFlow bring a greater degree of maturity to its operations.

I’ve been wondering for awhile how KashFlow would remain relevant in the midst of bigger and better funded competitors. While we don’t know until KashFlow starts delivering the fruits of this work – the two projects here indicate KashFlow really upping the ante.

Several others wrote posts about the exchange – some questioned the tone of Drury’s comment (and specifically the personal nature of them) while others were positive about the way Xero is executing.

In some follow up replies, Drury highlighted why he believes I have no credibility as a commentator and gave three questions that he believed I had failed to answer (or more rightly, three areas that he believed Xero was executing well in that I hadn’t covered).

I’ve only just seen his comment so it seems right that, despite being a month or so late, I should answer Drury’s questions here on my blog. Here follows Drury’s questions and my answers. As always I’d be more than happy to discuss these and other issues should Xero wish to engage.

1. No commentary on what it takes to build a business of the scale. We are very very lean compared to the incumbents. (What does Intuit spend on R&D?)

I’ve covered Intuit’s R&D at length (refer posts about IPP). They are already a business of scale and a well executed strategy that sees them provide some kind of hybrid cloud/desktop offering could become the default solution (because of their incumbency). So, Xero sits in an interesting space. On the one hand it doesn’t have the market penetration that the incumbents do (regardless of spend on R&D), on the other it has a significantly higher burn rate than SaaS competitors (KashFlow, FreeAgent etc etc etc). That’s fine as long as the burn rate translates into customer acquisition cost (CAC) below the competitors – at this stage that is not the case with those I’ve talked with.

This isn’t to say that Xero can’t do it – they certainly can, but, as per my initial question, I’d like to see some strategy that gives me confidence that they can scale faster (in relative terms) than the competition. I’ve not seen that as yet.

2. Where have the incumbents innovated? What shots have they fired at us? Isn’t it that the Incumbents have spectacularly failed so far? How many real online customers does Quickbooks have? How many countries? When/will they deliver in Australia?

Quickbooks online is a red herring. I’ve reviewed it and clearly it’s not a winning model. The Intuit Partner Platform is and this is absolutely where Xero should be giving attention. Calling out QBOE is a diversionary shot that is meaningless. Sage and MYOB are the unknowns (disclosure – I’ve done some consulting work with MYOB around their cloud strategy) – I’m not seeing anything impressive from them yet but their cash reserves and massive customer numbers create a potential risk for Xero, should they prove able to execute effectively.

3. What more agile startups? Who else has raised money? Who else has delivered 60+ releases? Is Xero not the most agile?

Agile startups? Well, firstly raising money is a very poor metric for success in the marketplace. On a money raised to customers acquired ratio, Xero is falling well behind their more nimble competitors. This is fine so long as Xero scales their customer acquisition up in line with their spend. But to claim that raising money is a proxy for success is simplistic. As to agility – product releases were, in my view, significantly more impressive before Xero took what I believe was a futile side move to create Xero personal (that in itself deserves its own post but to summarize, personal financial management products have proven to not be a sales tool for SMB financial products). The Yodlee integration took longer than ideal and, more importantly, longer than Xero promised. SSO integration with Google apps has now happened, but it took a year and Xero went on record saying that they wouldn’t do it because of “security risks”. So yes, Xero is undeniably more agile than the triumvirate of incumbents (Sage, Intuit, MYOB) but I don’t believe it is significantly more agile than it’s stable-mates in the SaaS accounting space.

MyBusinessWorks is set up as a one-stop-shop for SMB software tools. In addition to FreeAgent for accounting, it offers;

• Business planning with LivePlan
• Legal forms and documents from Rapidocs
• Backup from Mozy
• Training from MindLeaders

All these tools are packaged together and obtained directly from the bank – easing the billing and provisioning hurdles for SMBs. The deal includes single sign on support and automatic provisioning (via SAML). All billing goes through Barclays

This is a fantastic route to market for FreeAgent, I’ve always been a little concerned about SaaS accounting vendors relying primarily on accounting practices as their route to market – accountants (and this is a gross generalization) tend to lack the agility, flexibility and innovativeness to really deliver a sufficient number of customers for a SaaS accounting vendors – especially so given the fact that if a SaaS accounting product does (as many of us contend) save practitioners time and money, then that might in fact lead to reduced revenue for said practitioner. A topic discussed on Adrian Pearson’s post.

ANyway, back to this deal. FreeAgent CEO Ed Molyneux didn’t divulge pricing for the deal but did say that;

Margins are lower than direct customers, as you’d expect, but the rapidly increasing surface area of FreeAgent customers makes word-of-mouth even more powerful and allows us to build in some really interesting network effects.

This is a great win for FreeAgent, but also a great “Cloud goes mainstream” story too. This deal should see FreeAgent gain a real toehold in the UK market which, in turn will help some of the other players gain a bigger toehold in the marketplace. Molyneux did tell me something very interesting in that with the soft-launch of this product into Barclay’s branches;

we’re now growing several times faster than Kashflow, Xero etc.

That’s a pretty bold statement and one that is even more interesting given the combined facts of Xero’s high level of capitalization and the recent news that Kashflow has pulled the pin on fundraising efforts for now.