Accounting and business management software company Xero will “exit” its lending business Waddle as part of the “streamlining” program it announced yesterday.
Xero said it will write off A$30 to $40 million in the current financial year as a result of the Waddle decision.
Waddle has around 40 staff. Xero’s announcement did not say whether it would seek to sell the business, sell its assets or close it down.
A Xero spokesperson was not able to say how the exit from the business would be managed.
Waddle is a cloud-based lending platform offering invoice financing. It was launched in 2014 and acquired by Xero in 2020 for $31 million upfront and earnout payments that had the potential to take the total consideration to $80 million.
At the time of the deal, Xero said: “Waddle’s best-in-class cloud lending platform, combined with small business invoice data, will enable the delivery of tailored invoice financing solutions.”
The decision to get out of lending is not a complete surprise. In its financial report for the six months to September last year, Xero detailed a $25.9 million impairment “due to changed operational and market conditions for the Waddle business.”
Overall, Xero will cut its headcount by 700 or 800 as it “balances growth and profitability”.