Australian based invoice financing startup Waddle is set to be acquired by the ASX-listed cloud accounting giant Xero in an AU$80 million deal. As a part of the deal, Xero will make upfront cash payment of AU$31 million and subsequent earnout payments of upto AU$49 million on the basis of product development. This rounds up the total potential buyout of Waddle of worth AU$80 million.

Waddle: Cloud-Based Lending Platform

Waddle is an innovative Invoice finance platform founded in 2014 by school friends Nathan Andrews and Simon Creighton. It is designed to help SMEs access working capital. The lending platforms service helps banks and fintech companies to access funds more easily by automating their manual process usually involved in invoice financing. 

In 2018, the startup secured a $50 million wholesale debt facility and raised $4million in series A funding. Waddle has been Xero’s ecosystem partner since 2016 and has agreements with lenders and banks in Australia and the United Kingdom. 

Xero waddle acquisition | iTMunch

Image Source: Xero

Waddle-Xero deal

Xero CEO Steve Vamos states that the acquisition will help the small business meet their financial needs and is also an important part of their strategy to manage cash flow for SMEs. The deal is anticipated to be complete by the end of 2020. Any earnout payments will be covered 50% in cash and the rest in Xero shares. 

Waddle, will however be retained as a stand-alone brand and will continue to offer invoicing finance on Xero marketplace. Post-acquisition, Waddle can assist small businesses to gain access to capital. Xero states that the acquisition will have minimal impact on its earnings for the financial year 2021 before tax, interest, depreciation and EBITDA.

Xero welcomes Waddle and continues to support its open ecosystem with over 200 API connections and financial service partnerships.

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