Xero Limited, a global accounting software company, is expanding its reach by acquiring South African cloud-based platform, Syft Analytics.
This acquisition aims to enhance Xero’s reporting, insights, and analytics offerings across key markets such as Australia, the UK, and the US.
Syft Analytics, based in Johannesburg, provides cloud-based reporting tools utilised by accountants and small businesses in over 80 countries. Xero intends to gradually integrate Syft’s software into its own platform, offering its customers deeper analytics and financial forecasting.
Syft’s tools allow users to efficiently review, analyse, and predict financial outcomes, a valuable function in both stable and challenging economic conditions.
Xero’s acquisition aims to strengthen its offerings, particularly benefiting its small business and accounting clientele.
The deal, valued at up to $70 million, includes an upfront payment of $40 million, with an additional $30 million linked to employee incentives and other conditions over a three-year period.
Most of Syft’s 70-strong workforce, based in South Africa, will join Xero following the acquisition. Despite the scale of the transaction, Xero anticipates minimal impact on its financial performance in the near term, specifically in the fiscal year 2025.
Sukhinder Singh Cassidy, CEO of Xero, stressed the importance of the acquisition in fulfilling the company’s strategy to provide more comprehensive solutions for small businesses and their advisers. In adding the functionality of Syft Analytics, Xero aims to offer more detailed insights and advanced reporting, helping users make more informed business decisions.
Cassidy further noted that this acquisition aligns with Xero’s goal of strengthening its accounting solutions, one of the firm’s core strategic priorities.
Syft will continue operating independently as part of Xero’s app ecosystem, allowing current customers to benefit from its advanced analytics and benchmarking capabilities while ensuring new customers will eventually experience an integrated solution. Completion of the acquisition is expected in late 2024, subject to the necessary regulatory approvals.
This acquisition follows recent deals of large multinational companies acquiring innovative South African technology startups, with Syft being a good example of a SaaS company attracting international interest.
