Xero, a prominent accounting software company, has announced its acquisition of Syft, a cloud-based reporting and analytics platform based in South Africa, for $70 million. The deal is expected to be finalized between October and December 2024, pending regulatory approval.
Syft, established in 2016 by Matt Stephanou and Vangelis Kyriazis in Johannesburg, offers AI-driven financial reporting tools for small and medium businesses. With $4.4 million in revenue generated in 2023 from 75,000 customers in 80 countries, Syft has shown significant growth.
The acquisition deal involves Xero paying $40 million upfront, including $10 million in shares, with the remainder to be paid over three years through earn-outs and employee-restricted shares. Additionally, Syft’s 70 employees will become part of the Xero team.
Syft CEO Kyriazis expressed enthusiasm about the acquisition, stating that joining Xero aligns with their mission of supporting small businesses. This move will enhance Xero’s offerings by integrating Syft’s reporting tools for both current and new customers.
This acquisition follows a trend of global companies acquiring South African SaaS startups. In a previous deal, US-based payroll provider Deel acquired South African payroll startup PaySpace.
Syft will continue to operate independently, providing its services to small businesses. Xero plans to leverage Syft’s capabilities to enhance its reporting and analytics features for customers in various markets, including Australia, the UK, and the US.
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