Sam Morgan, who made his fortune when Trade Me was sold to Fairfax Media, has trimmed his holding in Xero, taking advantage of a share price that has soared by 179 percent this year.
Morgan, a director of Xero, sold 1 million shares at $7.40 apiece in an off-market transaction to New Zealand institutions.
The sale reduces his stake to 4.37 percent of the company and means he is no longer classed as a substantial security holder.
"Xero is my largest individual investment and trimming my shareholding is something I've done simply to restore a bit of balance in my portfolio after Xero's share appreciation in 2012," Morgan said in a statement.
Morgan isn't the only director to trim his holding as the share price has sky rocketed.
Last month, the company's three largest shareholders - chief executive Rod Drury, director Craig Winkler and co-founder Hamish Edward sold a total of $22 million shares at $6 apiece in parallel with Xero's $60 million sale of new shares at the same price to Peter Thiel's Valar Ventures and Matrix Capital Management.
That saw Drury's holding reduce to 18.5 percent from 21 percent, Winkler's drop to 15.7 percent from 19.5 percent and Edward's to 4.9 percent from 5.7 percent.
Matrix now owns 9.8 percent and Valar holds 7 percent of the cloud-based accounting platform.
Last month Xero posted a wider first-half loss and said the loss will be bigger still in the second half as it takes on workers to chase global sales. Sales soared 119 percent to $17.3 million in the first half, while operating expenses rose 105 percent to $22.8 million.
Xero expects to double operating revenue in the full year and said it has sufficient cash to implement its strategy.