Xero to acquire Aussie invoice lending platform Waddle for $57m
Xero, the New Zealand-founded cloud accounting platform for small businesses, has bought Aussie invoice lending platform, Waddle.
The soon-to-be acquired firm helps small businesses access capital through invoice financing.
Xero – which is listed on the Australian Stock Exchange (ASX) – says the deal is part of its plan to broaden access to capital through its own platform.
The deal will see Xero enter the small business lending market, and better leverage the $850 billion in invoices which flow through its platform each year.
The New Zealand firm is purchasing Waddle for AUD 80 million ($57.36 million). As part of the deal, Xero will offer an upfront cash payment of AUD 31 million ($22.23 million).
Subsequent earnout payments – based on product development and revenue milestones – will reach as much as AUD 49 million ($35.13 million).
“When you look at the range of applications being used by small business there is still tremendous scope for growth,” Xero’s CEO, Steve Vamos, told the Sydney Morning Herald.
Xero’s shares hit more than AUD 100 on 25 August, surging to AUD 101.24. The company now has a value of AUD 12.86 billion ($9.2 billion).
Simon Creighton and Nathan Andrews founded Waddle back in 2014. Since then, the founders have created existing agreements with banks and lenders across Australia and the UK.
The company has been a Xero ecosystem partner since 2016. It uses accounting data to automate the manual process of invoice financing.
Alongside its core lending platform, Waddle also operates a small direct lending portfolio used primarily for product development.