US fintech Bill.com snaps up Invoice2go for $850 million

US-listed small business software company Bill.com (NYSE:BILL) is acquiring Australian SMB fintech Invoice2go for US$625 million (A$850m).

The deal has been approved by the boards of both companies and is expected to close by the end of 2021, subject to receipt of regulatory approvals.

The acquisition cost is split between 75% in Bill.com common stock and 25% in cash. The US company’s market cap risen by more than 10% to US$19.4 billion on the news.

Invoice2go is a mobile-first accounts receivable (AR) invoicing app, founded in 2002, that lets small businesses and sole traders send invoices immediately after finishing a job. It has offices in Sydney and Palo Alto, California, with a global customer base of more than 225,000 business in 160 countries, processing more than A$24 billion in payments.

Bill.com CEO and founder René Lacerte said the acquisition will enhance the company’s current accounts receivable offering to help businesses get paid faster and more conveniently with electronic payments.

“We are investing to accelerate the adoption of our accounts receivable offering. The acquisition of Invoice2go will bring a leading product and a very talented team to Bill.com,” he said.

“It supports our strategy to invest in our platform to be a one-stop shop solution for businesses to transform their financial operations, make and receive payments, and manage their cash flow. Invoice2go’s international team and customer base will enable us to serve more businesses around the globe.”

Lacerte said most US small business transactions are still made with paper cheques, but their customers are eager to shift to digital and e-payments.

“Our payments expertise and go-to-market capabilities combined with Invoice2go’s product capabilities can make it even easier for businesses to get paid quickly and electronically,” he said.

“Between Bill.com and Invoice2go, there are billions of dollars of invoices being sent annually that can be enabled for electronic payments.

Invoice2go CEO Mark Lenhard said the two companies share a culture of innovation and delivering customer value for small business owners.

“Combining Bill.com’s market-leading payments platform and broad market reach with Invoice2go’s deep AR expertise provides a unique opportunity to offer SMBs and freelancers a powerful platform to streamline their day-to-day financial operations and control their cash flow,” he said.

“Once the transaction closes, the two businesses will work towards offering a single solution for all your invoicing, bill pay, and spend management needs—no more wasting time on tying revenue and expenses together or waiting for a tool that does everything small businesses need.”

Founder Chris Strode launched his fintech in the NSW Central Coast town of Erina nearly 20 years ago, having witnessed the cash flow challenges of his tradie brothers when it came to getting paid.

Invoice2go raised $10 million in 2018 and $15 million in 2016 and most notably, US$35 million in 2014.

Silicon Valley veteran, Lenhard, the former SVP of strategy and growth at Magento, took on the CEO role at the beginning of the pandemic in 2020.