As it aims to expand its small business platform, accounting software provider Xero plans to acquire cloud-based lending company Waddle through an arrangement valued as high as approximately $57.5 million, according to a Tuesday (Aug. 25) announcement from Xero.
Xero will provide payment in cash of $22 million upfront, followed by payments of as much as $35 million.
“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 in the announcement. “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.”
Waddle, which is headed up by co-founders Nathan Andrews and Simon Creighton, allows FinTechs and financial institutions (FIs) to provide loans to smaller companies in a more straightforward fashion through the digitization of many procedures and the harnessing of accounting information. The company’s team is based in Sydney, Australia.
Waddle has current relationships with lenders and FIs in Australia as well as Britain. And Xero, which offers accounting software based on the cloud, links over 2 million subscribers with an ecosystem that has more than 800 third-party programs in addition to “200 plus” links to financial service companies and banks.
In a separate development, news surfaced that Xero’s new search function would make it simpler for companies to find the apps they require and offer a “personalized, intuitive, and efficient experience” per a press release in June.
The new Coveo-fueled search ability will provide suggestions when a user logs in as well as a custom flow of popular programs and fast links customized to individual companies. Coveo's recommendations technology harnesses machine learning to suggest apps and sites based on the profile of a company when signed in.