Cloud accounting software maker Xero has acquired Hubdoc, a data capture solution very popular with Xero users. The move is reminiscent of Intuit’s purchase of TSheets last year, a solution that proved so popular with its users that it made itself an attractive buy for the larger company.
This deal is valued at $70 million. Xero will pay the acquisition price for Hubdoc in two stages: Initially, with $60 million consisting of 35 percent cash and 65 percent Xero equity. A second tranche of $10 million in equity will be issued to Hubdoc’s shareholders in 18 months, subject to meeting agreed operational targets and conditions. The transaction is expected to be completed in by the end of August 2018.
According to Xero, the buy is part of its vision for “code-free accounting,” aimed at freeing accountants from tedious data collection.
Hubdoc and Xero have offered software integration since 2014. Hubdoc is now one of the most popular apps on the Xero app marketplace, and previously won the 2016 Xero App Partner of the Year award, the very first Xero Partnership Impact award in 2017, and is a Xero HQ integrated partner.
Xero and Hubdoc’s existing integration features include:
- Data capture: Hubdoc complements Xero’s “financial web” strategy by auto-fetching financial documents from over 700 utilities, telecom providers, banks and online vendors, extracting the key financial data and source documentation and then syncing the data into Xero.
- Real-time financial data: Xero can automatically match data imported from Hubdoc with bank feed transactions, so that advisors and their clients have an always up-to-date set of books.
- Organized and Verified data: Financial documents are organized, secure, and always available. All data is “verified” with the source document, stored and searchable on any device.
Hubdoc will continue to operate on a stand-alone basis, with Xero planning to build a deeper integration between the two over the next few years. Hubdoc will continue to be led by co-founders and CEOs Jamie Shulman and Jamie McDonald. They will report to Keri Gohman, president for Xero Americas.
“Bringing Hubdoc into the Xero family will enable us to take the next step in delivering a platform that seamlessly connects small businesses with their financial data and their accountants and bookkeepers,” said Gohman, in a statement. “This is all about accelerating our ability to streamline the collection and classification of that data so that small businesses and their advisors can answer the big questions, and find lasting success.”
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