The cloud accounting company and small business platform Xero has announced the acquisition of UK-based Instafile.
Instafile is a cloud-based account preparation and tax filing solution that connects UK accountants, bookkeepers and small businesses to UK compliance agencies.
The acquisition price is a maximum of £ 5.25 million – NZ $ 10 million – paid for three years, with Instafile expected to meet certain performance targets to get top payments.
According to Xero, the acquisition, expected to be completed next month, will provide valuable direct tax filing functionality for accountants and small businesses in the UK.
"The main space for Xero's growth in the UK is very interesting and the initiatives we announced will allow Xero's accounting and bookkeeping partners to efficiently submit tax returns and free time to focus on providing consulting services to their small business customers," said CEO Steve Vamos, who took the position of head of founder Rod Drury earlier this year.
Xero is also now registered with the UK Financial Behavior Authority as an Account Information Service Provider, which according to the company makes it possible to take advantage of the UK open banking regime.
The Instafile announcement was made at Xerocon London, where the New Zealand-based company also launched an update for Hubdoc, which was seized in July for $ 70 million.
Hubdoc now automatically picks up bills, receipts, and other financial documents from more than 150 financial institutions and vendors that small businesses interact with every day, feeding them directly to the Xero accounting platform, Xero explained.
Xero said it bought Hubdoc to streamline administrative tasks such as collecting financial documents and data entry.
British financial institutions including Tide, Starling, TransferWise, Revolut, and Soldo will also provide faster direct feeds into the accounting platform so that British businesses can track foreign exchange payments, manage costs, and uncover deep insights into their performance, the company said on Thursday . .
Xero ended another half year in red, last week posted a loss of NZ $ 28.6 million for the first half of 2019.
That figure dropped from NZ $ 19.6 million losses reported in H1 FY18.
Earnings before interest, taxes, depreciation and amortization (EBITDA) were NZ $ 16.8 million, compared to NZ $ 15.6 million in the same period the previous year. EBITDA excluding declines came in NZ $ 34.5 million, up from NZ $ 17.1 million.
Xero offers 657,000 customers in Australia, 324,000 customers in New Zealand, 355,000 customers in the UK, 178,000 customers in North America, and 65,000 customers worldwide.
For the 2018 financial year, Xero posted a loss after tax of NZ $ 27.9 million. The results were much improved in FY2017, which saw the company report a post-tax loss of NZ $ 69.1 million.
The company reported an EBITDA of NZ $ 26 million, an increase of NZ $ 54.6 million for EBITDA losses of F $ 17.6 million FY17.
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