Accounting software firm Xero buys New York's Melio for $4b in a bid to crack US market
Accounting software firm Xero will buy New York-based Melio Payments for $2.5 billion ($3.9b) in a bid to push deeper into the US market.
Announced to the Australian Securities Exchange on Wednesday, the deal marks Xero chief Sukhinder Singh Cassidy's first major acquisition since she stepped into the top job in February 2023.
Melio — founded in 2018 — has offices in New York and Tel Aviv, and provides accounting and payments software to small and medium-sized businesses in the food, beverage and construction sector.
Melio has about 80,000 customers and processed about $US30b of payments in the 2025 financial year to generate $US153 million in revenue.
Meanwhile, Xero provides accounting software for invoicing, payroll and other functions primarily to small business. Headquartered in Wellington, NZ, it also has a presence in Australia, the UK, US, Canada, Singapore and South Africa.
In the US, it has 400,000 subscribers compared with one million in the UK and 2.3 million in Australia and New Zealand.
The company said the combined business would significantly accelerate US revenue growth and presented an opportunity to more than double its group revenue in the 2028 financial year.
Ms Singh Cassidy said it was excited to welcome Melio's world-class team and looked forward to working together to deliver shared goals.
'Adding Melio's world-class team, technology platform, and innovative (accounts payable) solutions to Xero enables a step change in our North America scale,' she said, adding it had the potential to help millions of US small and medium businesses, and their accountants, better manage their cash flow and accounting on one platform.
'Xero and Melio are highly complementary — together they complete the key jobs to be done for US SMBs, extend reach across customer segments, provide both direct and syndicated offerings, and deliver multiple revenue drivers.'
Melio co-founder and chief executive Matan Bar said joining Xero was an incredible opportunity for the team to further its mission to reinvent the way businesses paid each other.
Xero will fund the deal via a fully underwritten $1.85b institutional placement, $US360m of Xero scrip issued to existing Melio shareholders, a fully underwritten $US400m unsecured revolving credit facility, and $US600m of existing cash on Xero's balance sheet.
The deal is expected to complete within six months.
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