The prominent accounting software company Xero has announced its intention to acquire Syft, a South African cloud-based reporting and analytics platform, for $70 million. This acquisition is expected to be finalized between October and December 2024, subject to the necessary regulatory approvals.
Syft, established in Johannesburg in 2016 by entrepreneurs Matt Stephanou and Vangelis Kyriazis, offers an AI-powered financial reporting platform that equips small and medium-sized enterprises with advanced reporting tools. The company has experienced significant growth, reporting $4.4 million in revenue in 2023 and serving 75,000 customers across 80 countries.
Xero’s acquisition terms include an initial payment of $40 million, with $10 million of this sum to be settled in Xero shares. Additional payments, consisting of earn-outs and shares restricted to employees, will be distributed over a three-year period following the acquisition. Syft’s team of 70 employees is set to be integrated into Xero’s workforce.
Syft CEO Vangelis Kyriazis expressed enthusiasm about the acquisition, noting the longstanding collaboration between Syft and Xero. “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 stated.
This acquisition is part of a broader trend where global technology companies are acquiring South African SaaS startups. Earlier in March 2024, Deel, a US-based payroll provider, acquired PaySpace, a South African payroll startup, for an undisclosed sum.
Post-acquisition, Syft will continue to serve small businesses as an independent product. Xero plans to integrate Syft’s features, which include data visualizations, analytics, and reporting capabilities, to enhance the services offered to both new and existing customers. The integration of Syft is anticipated to bolster Xero’s capabilities in insights, advanced reporting, and analytics across several key markets, including Australia, the UK, the US, and other international territories.
