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The acquisition of the South African-based financial reporting platform is expected to improve Xero’s accounting offerings.
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Xero to buy reporting app Syft Analytics for US$70m
18 September 2024
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Xero will acquire South African cloud-based reporting platform Syft Analytics in a deal worth up to US$70 million as it seeks to improve its offerings for accountants.
The software giant said on Tuesday it would be integrating Syft’s functions progressively to enable users to process accounting data with “more powerful” analytics, reporting and benchmarking capabilities.
The deal comes as Xero pursues its new “3x3 strategy” of winning core accounting, payments and payroll customers in Australia, the UK and the US – its three largest markets, worth around $43 billion.
Chief executive Sukhinder Singh Cassidy said the acquisition would advance Xero’s accounting offering globally.
“Xero has always focused on reimagining how accounting software can empower small businesses by providing insights to help them and their advisors run their business better,” she said.
“Syft accelerates this further by offering deeper insights to help both small businesses and accounting and bookkeeping partners to make informed decisions.”
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“Todayʼs announcement supports our strategy to create winning customer solutions by strengthening our accounting offering - one of the three most critical small business jobs.”
Syft was founded by Vangelis Kyriazis, Eleftherios Kyriazis, Duran Hamer and Matt Stephanou in 2016.
It is currently a Xero app partner and is used by over 50,000 small and medium businesses for financial reporting, most of which are in Xero’s top markets.
It has approximately 70 employees and would continue to be based in Johannesburg after the deal is closed, expected by Xero to occur during the third quarter of FY25.
Syft would also continue being available as a standalone offering after the acquisition, Xero said.
Total consideration for the deal, including employee incentive payments, would be up to US$70 million.
This comprised an upfront payment of $40 million, including $10 million in Xero shares, and the balance in earnouts and employee-restricted stock units over three years.
The transaction was expected to have “minimal impact” on Xero’s financial metrics.
Xero’s agreement to acquire Syft follows a US$25 million investment in Deputy, an Australian shift work rostering app.
The partnership, announced in May, would bolster its payroll offerings by embedding Deputy’s capability into Xero Payroll for Australian customers.
In the same month, it announced changes to plans and pricing structures, including discontinuing its Payroll Only offering and bundling it with its Comprehensive plan that currently costs $90 a month.
Latest figures show the New Zealand firm recorded NZ$800 million in revenue growth in FY24, a 21 per cent year-on-year increase, and over $54 million in profit.
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