Cloud accounting firm cum small business platform Xero has announced the acquisition of United Kingdom-based Instafile.
Instafile is a cloud-based accounts preparation and tax filing solution that connects UK accountants, bookkeepers, and small businesses to UK compliance bodies.
The acquisition price is a maximum of £5.25 million -- NZ$10 million -- paid over three years, with Instafile expected to meet certain performance targets to obtain the top payout.
According to Xero, the acquisition, expected to be finalised next month, will provide valuable direct tax filing functionality to accountants and small businesses in the UK.
"The headroom for Xero's growth in the UK is very exciting and the initiatives we've announced will enable Xero's accounting and bookkeeping partners to efficiently file tax returns and free up time to focus on providing advisory services to their small business customers," said CEO Steve Vamos, who assumed the chief's position from founder Rod Drury earlier this year.
Xero is also now registered with the UK Financial Conduct Authority as an Account Information Services Provider, which the company said allows it to take advantage of the UK open banking regime.
The Instafile announcement was made at Xerocon London, where the New Zealand-based firm also unveiled updates to Hubdoc, which it scooped up in July for $70 million.
Hubdoc now automatically fetches bills, receipts, and other financial documents from more than 150 financial institutions and vendors that small businesses interact with daily, feeding them directly into the Xero accounting platform, Xero explained.
Xero said it purchased Hubdoc to streamline administrative tasks such as financial document collection and data entry.
UK financial institutions including Tide, Starling, TransferWise, Revolut, and Soldo will also be providing faster direct feeds into the accounting platform so UK businesses can track foreign exchange payments, manage expenses, and uncover deep insights about their performance, the company said on Thursday.
Xero ended another half-year in the red, last week posting a loss of NZ$28.6 million for the first-half of 2019.
The figure is down from the NZ$19.6 million loss reported in H1 FY18.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) was NZ$16.8 million, compared to NZ$15.6 million in the same period a year prior. EBITDA excluding impairments came in at NZ$34.5 million, up from NZ$17.1 million.
Xero boasts 657,000 subscribers in Australia, 324,000 subscribers in New Zealand, 355,000 subscribers in the United Kingdom, 178,000 subscribers in North America, and 65,000 subscribers in the rest of the world.
The company reported EBITDA of NZ$26 million, a NZ$54.6 million improvement over FY17's NZ$28.6 million EBITDA loss.
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