Xero to acquire invoice lending platform Waddle

Financial Services | Latest News | Mergers & Acquisitions

Xero today announces the acquisition of Waddle, a cloud based lending platform that helps small businesses access capital through invoice financing.

The acquisition aligns with Xero’s strategy to grow the small business platform and to address small business financial needs.

Founded in Australia in 2014, Waddle’s lending platform service allows a range of banks and fintechs to more easily lend to small businesses by leveraging their accounting data and automating many of the manual processes typically involved in invoice financing.

With an upfront cash payment of AUD 31 million and subsequent earnout payments based on product development and revenue milestones, of up to AUD 49 million, the total potential consideration for the purchase of 100 of Waddle is AUD 80 million.

Any earnout payments are expected to be settled 50 in ordinary shares in Xero and 50 in cash. Completion of the transaction is expected before the end of calendar year 2020 and is subject to satisfaction of closing conditions. Transaction, integration and operating costs are anticipated to have minimal impact on Xero’s FY21 EBITDA.

Led by co-founders Simon Creighton and Nathan Andrews, Waddle’s team is headquartered in Sydney and currently serves customers in Australia and the UK.

Xero CEO Steve Vamos comments: “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.

“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.”

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