Xero Drops $2.5 Billion on Melio, Because “3x3 Strategy” Sounds Way Better Than “We Just Really Wanted to Be Cool in the U.S.”
Xero is acquiring U.S. bill pay platform Melio for a casual $2.5 billion, or as it’s known in startup land, “a Series Z round in disguise.”
In today’s edition of “We Promise This Will Unlock Synergies,” Xero, the cloud accounting software you forgot was headquartered in New Zealand, has announced it’s acquiring U.S. bill pay platform Melio for a casual $2.5 billion, or as it’s known in startup land, “a Series Z round in disguise.”
Xero says the deal “aligns with our 3x3 strategy,” which, according to our best guess, is either a tic-tac-toe game, a secret accounting cult, or the number of buzzwords per sentence in the press release.
💳 What’s Melio Again?
Melio is apparently the leading platform (aren’t they all?) for small businesses to pay bills without paper cuts, fax machines, or the eternal mystery of “why did we mail this check to ourselves?” It boasts 80,000 customers and processed $30 billion in payments last year, which sounds impressive until you realize your friend’s Venmo probably did half of that during wedding season.
🧩 “A Powerful Strategic Fit,” Say Executives Who Definitely Don’t Just Want to Break into the U.S.
Xero’s CEO, Sukhinder Singh Cassidy, was positively glowing in corporate euphemisms:
“Together we complete the key jobs to be done for US SMBs.”
Translation: We bought Melio because we’re tired of being the “other” accounting software in America. Also, QuickBooks has been giving us side-eye at conferences.
Melio CEO Matan Bar added:
“Joining Xero is an incredible opportunity…”
Which roughly means: Cash out, keep our shares vesting, and finally get that Israeli fintech IPO exit glow — without actually IPO’ing.
📈 The Actual Plan: Revenue, ARPU, and Throwing a Lot of Words at the Problem
The release touts that this deal will triple Xero’s North American revenue on day one. Not through new customers, mind you. Just… accounting math. ARPU goes up, LTV increases, and somewhere in an Excel spreadsheet, someone’s bonus just got unlocked.
There’s also a lot of love for syndication — Melio apparently white-labels its services for the likes of Capital One, Fiserv, and Shopify. This means Xero now gets to ride those coattails too, assuming those partners don’t go “um, who dis?” once the ink dries.
🏦 $2.5 Billion in Cash + Equity… and $500M If They Overachieve
Xero’s putting up $2.5 billion in a mix of cash and equity, with another $500 million dangling in front of Melio employees if they outperform. This is standard startup acquisition lingo for “you get the rest if this thing doesn’t crash and burn in 18 months.”
Also notable: if the deal fails to pass antitrust review (because yes, bill pay is now apparently a potential monopoly concern), Xero will owe Melio a $37.5 million breakup fee. Because nothing says “serious commitment” like paying tens of millions to get ghosted by regulators.
🧠 Final Thoughts: When in Doubt, Just Buy Something
In short, this isn’t just an acquisition. It’s a statement. A vision. A meticulously jargonized fever dream of SaaS-meets-fintech-meets-syndication.
Or as Xero might put it:
A world-class combination delivering JTBD completeness and platform adjacency for SMB scale acceleration in a TAM-rich embedded ecosystem.
Godspeed, accountants.
