Cloud accounting firm Xero has acquired HubDoc, which provides data capture and financial document collection solutions for accountants, bookkeepers, and small businesses
The acquisition, part of Xero’s move to develop code-free accounting, brings the company closer to achieving its goal of streamlining and fully digitising its end-to-end accounting solutions. HubDoc’s services sync and automatically fetch documents stored in the cloud and merging the two services, Xero hopes, will create a complete solution that allows businesses to spend less time chasing paperwork and more time growing.
With 1.4m subscribers in more than 180 countries, and integrating with more than 700 apps, Xero has made a significant impact since its introduction. Founded in 2006, it was ranked No. 1 in Forbes’ list of the 100th most innovative growth companies in 2014, was rated by Canstar Blue as Australia’s best accounting software three consecutive years from 2015-201, was deemed ‘product of the year’ at the 2017 British Accountancy Awards and won Technology Provider of the Year for the British Small Business Awards.
Hubdoc has been integrated with Xero since 2014, having long been a leading application on the Xero app marketplace, as well as winning the 2016 Xero App Partner of the Year award and the very first Xero Partnership Impact award in 2017.
The acquisition will occur in two stages, with the New Zealand-founded business initially paying $60m consisting of 35% cash and 65% Xero equity. A second stage in 18 months will consist of $10m in equity to be issued to Hubdoc’s shareholders, subject to meeting agreed operational targets and conditions.
In a blog posted to the company’s website, Xero said: ‘Bringing Hubdoc into the Xero family will enable us to take the next step in delivering a platform that seamlessly connects small businesses with their financial data and their accountants and bookkeepers’.
But a spokesperson for Xero stressed the independence of the two products: ‘While this acquisition will allow Xero to build a deeper, more powerful integration with Hubdoc over time, Xero is an open ecosystem. That means that customers will continue to have the choice to use the apps that best meet their individual needs, including other data capture apps’.
Such acquisitions between accounting software platforms are becoming more common. In December of last year TSheets, a small-business focused time tracking technology provider, was acquired by Intuit for approximately $340m.
Report by James Bunney