The prominent accounting software company Xero has announced its plan to acquire Syft, a South African cloud-based reporting and analytics platform, for $70 million. The deal is expected to close between October and December 2024, pending regulatory approvals.
Syft: A Growing AI-Powered Platform
Founded in Johannesburg in 2016 by entrepreneurs Matt Stephanou and Vangelis Kyriazis, Syft has built an AI-powered financial reporting platform aimed at small and medium-sized enterprises (SMEs). The platform offers advanced reporting tools that have fueled its rapid growth. In 2023, Syft reported $4.4 million in revenue and currently serves 75,000 customers across 80 countries.
Acquisition Terms and Employee Integration
Xero’s acquisition agreement includes an initial payment of $40 million, with $10 million of that amount being paid in Xero shares. Additional payments, comprising earn-outs and restricted shares for employees, will be distributed over the following three years. Syft’s team of 70 employees will be integrated into Xero’s workforce as part of the deal.
CEO of Syft on Joining Xero
Vangelis Kyriazis, CEO of Syft, expressed excitement about the acquisition, emphasizing the existing relationship between the two companies. “Having met Xero’s senior leadership team over the past few months, we knew that joining Xero was a natural fit and would advance our shared goal of helping small businesses succeed,” Kyriazis said.
A Broader Trend in South African SaaS Acquisitions
This acquisition is part of a larger trend of global technology companies targeting South African SaaS startups. Earlier in March 2024, US-based payroll provider Deel acquired PaySpace, a South African payroll startup, for an undisclosed amount.
Syft to Continue as an Independent Product
Post-acquisition, Syft will continue to operate as an independent product, continuing to serve SMEs. Xero plans to integrate Syft’s advanced features, such as data visualizations, analytics, and reporting capabilities, into its existing services. The integration is expected to enhance Xero’s offerings in key markets, including Australia, the UK, the US, and other international territories, bolstering its capabilities in insights and advanced reporting.