New Zealand software vendor Xero is to buy Australian invoice lending platform Waddle for A$80 million.
Through the acquisition, the cloud accounting technology vendor will grow its small business arm and will also be in a better position to partner with lenders globally.
The ASX-listed firm will pay an initial cash sum of A$31 million, plus a further A$49 million based on whether Waddle meets product and revenue requirements.
“The acquisition of Waddle is an important step in our strategy to help small businesses better manage cash flow and gain access to working capital,” Xero CEO Steve Vamos said.
“Waddle’s lending platform has the potential to enable a wide range of banks, fintechs and other lenders to better support small business financial needs. We’re excited about the benefits Waddle can bring to many of our customers and banking partners.”
Founded by Simon Creighton and Nathan Andrews in 2014, Waddle’s team is headquartered in Sydney and currently serves customers in Australia and the UK.
The cloud-based software company, which has been a Xero ecosystem partner since 2016, will continue to offer services to customers and partners, including other accounting software providers, the ASX notice read.
Completion of the transaction is expected before the end of calendar year 2020.
The announcement follows Xero achieving its first full year net profit after tax in the financial year ending March, booking NZ$3.3 million, an improvement of NZ$30.5 million compared to a NZ$27.1 million loss in FY19.
The results revealed the company’s Australia subscribers grew by 26 per cent in the year, to reach 914,000; UK subscribers grew by 32 per cent, to 613,000; and New Zealand subscribers grew by 12 per cent in the year to 392,000.