Cloud accounting software vendor Xero has acquired Australian cloud-based lending platform Waddle for $31 million.
Xero said the acquisition aligns with the company’s ongoing strategy to grow its small business platform and address critical small business financial needs.
Sydney-based Waddle specialises in invoice finance technology that allows banks and fintechs to lend to small businesses more easily by leveraging their accounting data and automating manual processes involved in invoice financing.
The company was co-founded in 2014 by Simon Creighton and Nathan Andrews. Waddle has also been a Xero ecosystem partner since 2016.
In an announcement posted on Xero’s blog, Xero chief executive Steve Vamos said, “The acquisition of Waddle is an important step in our strategy to grow Xero’s small business platform and to help our customers better manage cash flow and gain access to working capital as needed.”
“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 small business and our banking partners.”
Waddle has existing arrangements with a number of banks and lenders in Australia and the United Kingdom, and also operates a small direct lending portfolio used mainly for product development.
The acquisition price includes an upfront $31 million in cash plus earnout payments based on product development and revenue targets of up to $49 million, making the total potential price of up to $80 million.