New Zealand-based accounting software firm Xero Limited has signed a binding agreement to acquire Melio, a U.S.-based bill pay platform, for up to US$3 billion. The deal, funded through a combination of cash and equity, includes an upfront payment of US$2.5 billion and up to $0.5 billion in additional payments over three years, contingent upon performance targets and the continued employment of Melio staff. The acquisition is expected to be completed within six months, subject to regulatory approvals. Melio, founded in 2018, has grown to serve 80,000 customers and processed over $30 billion in payments in FY25, generating $153 million in revenue. Its tools allow U.S. small businesses to manage accounts payable workflows and payment options, integrating with accounting systems to improve cash flow visibility.
Xero expects the acquisition to roughly triple its North American revenue and average revenue per user (ARPU) on day one, while improving customer lifetime value and unlocking growth opportunities in the U.S. market.
Xero’s CEO, Sukhinder Singh Cassidy, called the acquisition a “step change” in Xero’s presence in the U.S. adding, “Adding Melio's world-class team, technology platform, and innovative A/P solutions to Xero enables a step change in our North America scale.” Melio CEO and Co-Founder Matan Bar commented, “Joining Xero is an incredible opportunity for the Melio team to further our mission to reinvent the way businesses pay each other.” Upon completion, Bar will lead the combined U.S. operations, reporting to Cassidy. The acquisition aligns with Xero’s broader strategy to combine accounting and payment services in a single platform.
