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The app will provide integrated workforce management technology after Xero's retirement of Planday in Australia.
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Xero buys US$25m stake in Aussie app Deputy, ditches Planday
01 May 2024
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Xero will splash US$25 million to buy a minority stake in Deputy and integrate the local HR app’s workforce management tools into its platform after confirming it will retire its Planday product in Australia.
CEO Sukhinder Singh Cassidy said the decision to pivot to Deputy in Australia reflected Xero’s recently released FY25-27 strategy and would mean focussing Planday’s efforts on European markets instead.
“As part of our focused FY25-27 strategy, Xero continues to optimise how we allocate resources to get the right results for customers, Xero and our stakeholders,” she said.
Xero bought Planday three years after establishing a partnership for €183.5 million in 2021, the largest acquisition it its history.
Initially only servicing European markets such as the UK, Scandinavia, France and Germany, the deal saw Planday expand its operations to Australia and New Zealand.
Planday closing shop in Australia would involve an immaterial write down in FY25 of previously capitalised costs associated with Australian product development, Xero said.
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Singh Cassidy said Planday would instead “focus its efforts on its strong core European markets, and maximise subscriber growth and customer value creation opportunities there even further”.
“As part of our commitment to help small businesses run more effectively, we’re excited to deepen our already strong integration partnership with Deputy to bring their workforce management technology to Xero’s Australian customers, all in one platform,” Singh Cassidy said.
Xero said the partnership with Deputy, the shift work rostering software, would involve “deeply embedding Deputy’s capability into Xero Payroll for Australian customers, making payroll and workforce management even easier”.
It would also be bolstered by the purchase of a US$25 million minority stake to “further increase the two businesses’ focus and alignment”, it said.
Deputy CEO Silvija Martincevic said the new partnership between Xero and Deputy reflected their values of product excellence, innovation and serving the needs of small businesses.
“Deputy is thrilled to announce this transformative strategic partnership with Xero as it connects two industry-leading global companies to offer a seamless all-in-one solution for accounting, payroll, and workforce management,” she said.
“By embedding our platforms through this partnership, we will empower hundreds of thousands of businesses across Australia with the tools they need to thrive in today's dynamic business environment.”
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