'Flow-of-money business': MYOB's new life under private equity

MYOB's new chief executive does not come to work to "leave a legacy", though he will oversee a wide-ranging plan to invest in new products as the company reaches beyond its accounting roots.

"I see MYOB as a 'flow-of-money' business ... I think our focus has been too much on accounting," Greg Ellis said.

MYOB chief executive Greg Ellis was previously boss of REA Group and German real estate listings company Scout24. Credit: Lousie Kennerley

Mr Ellis is no stranger to chairing fast-growing technology companies, heading up REA Group from 2008 to 2014 and German real estate and auto listings operation Scout24 from 2014 to 2018.

He took the reins at MYOB from long-serving chief Tim Reed last September, months after the business returned to private equity ownership after a $1.6 billion takeover from KKR Group.

Mr Ellis said the private equity ownership structure was ideal for the accelerated product development the company would now undertake.

MYOB announced a major upgrade of its small business platforms on Wednesday including an upcoming integration with 150 extra apps, and will look to expand beyond its traditional accounting offers and into areas including invoice financing and e-invoicing.

MYOB would also focus on gig economy workers and sole traders with a planned rollout of services specifically for that market, Mr Ellis said.

"The fact that we need to have a proper, true sole trader app is something we want to focus on."

Competition in the cloud accounting software market has been fierce in recent years with MYOB going head to head with ASX-listed Xero.

Xero confirmed it had passed 2 million subscribers last November, when it posted a record revenue of more than $338 million for the first half of 2020.

Now that MYOB has been delisted from the ASX it is not required to post annual financials. When the company last reported to the market one year ago, it posted revenue of $445 million and was approaching 1 million subscribers.

The Xero share price has increased 30 per cent over the last six months and was sitting at $84.42 on Wednesday morning.

Mr Reed was at the helm of MYOB for more than a decade and was widely congratulated on his tenure last year. He said his one regret when growing the business was that the company should have gone "harder, faster" on product development – an observation Mr Ellis echoed.

"Are we doing it good enough, faster enough and better than what we were yesterday?" he asked.

Mr Ellis said he hated the expression "fail fast" and instead wanted to increase the company's focus on developing new products that its small business customer base actually wanted.

When asked how his leadership style would compare to Mr Reed's, Mr Ellis said he didn't ever compare himself to predecessors.

"I don’t come to work every day to leave a legacy. I want to leave a company in a healthy condition," he said.

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