Crowded SME Lending Space Welcomes New Player
(28 August 2020 – Australia) Xero has announced its plan to launch SME lending alongside its leading accounting software offering by acquiring invoice finance platform Waddle for A$80 million.
Waddle leverages accounting data from Xero, MYOB and QuickBooks to offer lines of credit based on a business’ invoices. he Sydney-based fintech also holds existing agreements with banks and lenders in Australia and the UK to help automate their invoice finance arrangements.
While the acquisition marks the first stage of Xero’s foray into SME lending, the cloud-based accounting software company has said that it will work with Waddle to explore ways to expand its small-business customers’ access to forms of lending beyond invoice financing. While the company will be acquired by Xero it is expected that Waddle will continue to offer services to customers and partners, including other accounting software providers by remaining as a standalone company.
The move follows a flurry of SME lending acquisition activity in 2020. SME lender Grow Finance acquired Australian Invoice Finance, CML Group has entered into a binding agreement to purchase Skippr Invoice Finance following a failed bid by Scottish Pacific and US financial services technology group Enova is set to acquire OnDeck.
“The acquisition of Waddle is an important step in our strategy to help small businesses better manage cash flow and gain access to working capital. 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” stated Xero CEO Steve Vamos.
“The acquisition positions Xero to partner with lenders globally to better serve small businesses’ working capital and other financial needs. We’re excited about the benefits Waddle can bring to many of our customers and banking partners” Mr Vamos added.
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