Global accounting software provider Xero has announced plans to acquire Syft Analytics, a South Africa-based cloud-based reporting and analytics platform, in a deal valued at up to $70 million. The acquisition is expected to strengthen Xero’s advanced reporting capabilities, providing deeper insights for small businesses and their advisors. This strategic move signals Xero's continued commitment to enhancing its suite of financial management tools to support data-driven decision-making for businesses globally.

Xero’s Acquisition Strategy

Xero, headquartered in New Zealand and listed on the Australian Stock Exchange, will pay $40 million upfront for Syft, which includes $10 million in stock. The remaining $30 million will be issued over the next three years as performance-based earnouts and restricted stock, subject to certain milestones being met. The acquisition is expected to close by the end of 2024, marking a key development in Xero's efforts to expand its reach in the cloud-based financial reporting sector.

Sukhinder Singh Cassidy, CEO of Xero, emphasized the importance of integrating advanced analytics capabilities into Xero’s platform to help small businesses and their advisors make more informed decisions. "We are thrilled to welcome the Syft team, whose expertise will enhance our ability to provide advanced insights and reporting tools to empower small businesses globally," Cassidy stated. She added that the acquisition aligns with Xero's long-term vision of building an ecosystem that helps small businesses thrive.

Syft's Journey and Success

Founded in Johannesburg, South Africa, in 2016 by Eleftherios Kyriazis, Matt Stephanou, and Vangelis Kyriazis, Syft Analytics started as a bootstrapped startup focused on providing financial insights to small businesses. By the end of 2019, the company had garnered 200 customers, but its global reach took off during the COVID-19 pandemic when businesses worldwide transitioned to remote operations and cloud-based solutions became essential.

Syft now serves thousands of customers in over 80 countries, making it one of the most popular reporting and insights platforms available in Xero’s App Store. The platform's custom reporting, data visualization, benchmarking, and multi-entity reporting capabilities have made it a vital tool for accountants and bookkeepers, who use it to generate comprehensive financial reports and forecasts. The company has also integrated with several major financial services platforms, including Stripe, Shopify, Square, Gusto, and Excel, further broadening its utility for small businesses.

In a statement following the acquisition announcement, Syft co-founder Eleftherios Kyriazis expressed excitement about the company's future with Xero. "Joining forces with Xero allows us to accelerate our mission to provide powerful insights and analytics to small businesses worldwide. We look forward to bringing our advanced reporting tools to an even larger audience," Kyriazis said.

Syft to Operate as a Standalone Offering

While Xero plans to embed Syft’s features into its platform over time, it has assured customers that Syft will remain available as a standalone product, accessible to users regardless of their accounting software provider. This decision reflects Xero’s commitment to maintaining an open ecosystem, offering its customers flexibility in choosing the tools that best meet their needs.

“Syft’s strengths in cloud-based reporting, visualizations, and insights align perfectly with our vision for the future of financial management,” said Diya Jolly, Xero's Chief Product Officer. “As we integrate Syft’s capabilities into Xero, we will ensure that the platform remains accessible to all businesses, no matter what accounting software they use.”

Jolly further emphasized that Syft’s ability to consolidate financial data from multiple sources, combined with its advanced forecasting and budgeting tools, will greatly enhance Xero’s current offerings. The integration of Syft’s technology is expected to provide Xero customers with deeper insights into their financial data, helping them make more informed and strategic decisions.

Strengthening Xero’s Global Footprint

The acquisition of Syft represents a significant investment in Xero's global growth, particularly in key markets like the United States, the United Kingdom, and Australia. Xero has been expanding its product offerings to meet the growing demand for cloud-based solutions that provide small businesses with real-time financial insights. By integrating Syft's advanced analytics, Xero aims to offer a more comprehensive suite of tools to small business owners, accountants, and bookkeepers, giving them greater control over their financial operations.

Syft’s success also highlights the burgeoning South African tech ecosystem, which has seen a number of local startups attract international interest and investment in recent years. As Syft transitions under Xero’s ownership, its team of more than 70 employees, predominantly based in South Africa, will continue to play a vital role in developing the platform’s capabilities and supporting its global user base.

Xero's acquisition of Syft Analytics highlights the growing demand for cloud-based financial solutions. By integrating Syft’s advanced analytics, Xero aims to enhance its platform and provide powerful insights to small businesses globally. As the deal closes by the end of 2024, Xero will work to integrate Syft while keeping it available as a standalone product, reaffirming its commitment to flexible, data-driven solutions for business success.