H&R Block to acquire Canadian fintech startup Wave

Accounting and tax-prep firm H&R Block said Tuesday that it plans to acquire Wave Financial for $405 million. Toronto, Ontario-based Wave offers free accounting, invoicing, and receipt-tracking software for small businesses, and generates revenue via payment processing, payroll and bookkeeping services. 

For H&R Block, the acquisition -- and Wave's customer base of 400,000 small businesses globally -- will significantly bolster its product and client portfolio and strengthen its position in the small business market. In a press release, the tax services giant also pointed to Wave's pricing and low-cost customer acquisition model as opportunities for future growth. 

"Bookkeeping and cash flow management are significant pain points for small business owners and essential to successful annual tax preparation," said H&R Block chief executive Jeff Jones. "Wave addresses these concerns by delivering financial solutions and a simple user experience on a single platform. Wave provides us the opportunity to accelerate our small business strategy and is a great strategic fit, as both companies can leverage each other's capabilities to bring tax and financial solutions to small business owners, serving more clients in more ways."

When the deal closes, H&R Block said Wave will operate as an independent subsidiary from its HQ in Toronto, with current CEO Kirk Simpson.

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