Xero acquires Syft Analytics for USD $70 million

Xero, the global small business platform, has announced its acquisition of Syft Analytics, a cloud-based reporting, insights and analytics platform for accountants, bookkeepers, and small businesses. The move is aimed at enhancing Xero's insights, advanced reporting, and analytics offerings for its global customer base, including markets in Singapore and Australia.

According to Xero, it plans to integrate Syft's functionalities into its own platform gradually, providing customers with more advanced analytics, reporting, and benchmarking capabilities. The total consideration for the acquisition, including related employee incentive payments, amounts to up to USD $70 million. This includes an upfront payment of USD $40 million, with approximately USD $10 million in Xero shares, and the balance to be paid in earnouts and employee restricted stock units (RSUs) over the next three years.

The transaction is expected to be completed in the third quarter of Xero's FY25, subject to the satisfaction of customary closing conditions and necessary approvals. Xero anticipates that the transaction, integration, and associated operating costs will have minimal impact on its financial metrics for FY25.

Xero's CEO, Sukhinder Singh Cassidy, commented on the acquisition: "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. Syft accelerates this further by offering deeper insights to help both small businesses and accounting and bookkeeping partners to make informed decisions. Today's announcement supports our strategy to create winning customer solutions by strengthening our accounting offering - one of the three most critical small business jobs."

Headquartered in Johannesburg, South Africa, Syft's software is utilised by accountants and small businesses in over 80 countries. The majority of these customers are based in Xero's most significant markets. Syft is known for helping users review, analyse, and forecast financial outcomes, which is increasingly valuable in various economic environments.

More than 70 Syft employees, the majority of whom are based in South Africa, will transition to Xero as part of this acquisition. Syft is already a top app partner in the Xero App Store. Post-acquisition, Xero plans to continue making Syft available as a standalone offering.