Accounting software company Xero has entered the finance market, with the acquisition of local invoice finance company Waddle.

Waddle was founded in 2014 and, according to its website, has provided A$330 million of finance since then. It has had a $50 million wholesale facility since 2018 and also distributes for other lenders.

Waddle has worked with Xero since 2016 when it joined Xero’s “add-on marketplace”, allowing businesses to use their Xero data when applying for finance.

Waddle claims that its platform “allows a range of banks and fintechs to more easily lend to small businesses by leveraging their accounting data and automating many of the manual processes typically involved in invoice financing.”

It has similar partnerships with MYOB and QuickBooks. Xero did not say whether those relationships would continue post-acquisition.

Xero will pay $31 million upfront and up to $49 million on an earnout basis.

Xero chief executive Steve Vamos said in a statement: “The acquisition of Waddle is an important step in our strategy to help small businesses better manage cash flow and gain access to working capital.”