Melio acquired by Xero in $2.5 Billion Deal

New Zealand-based accounting software firm Xero has announced the acquisition of U.S. payments provider Melio for $2.5 billion, marking one of the largest outbound deals for a New Zealand company.  

Founded in 2018, Melio built its reputation as a fast-growing player simplifying payments between small businesses. At its peak, Melio had raised over $500 million from prominent backers, including Accel, Bessemer, and Coatue, with its last reported valuation hovering around $4 billion in 2022.

The company scaled its revenue from $6 million to a staggering $183 million run rate as of March 2025 — a nearly 30-fold increase. Such growth reflects both the strength of its product and demand for digitized B2B payment solutions, especially among small and mid-sized businesses.

The acquisition aims to enhance Xero's presence in the U.S. market, where it currently derives only 7% of its sales. Integrating Melio’s payments capabilities with Xero’s accounting software is expected to offer U.S. small-to-medium businesses a comprehensive financial platform.

Xero CEO Sukhinder Singh Cassidy described the move as a significant step toward scaling operations in North America and improving cash flow and accounting management for clients. The company forecasts that the acquisition will double its 2025 financial sales by 2028.

To fund the purchase, Xero suspended trading of its shares and is raising A$1.85 billion from institutional investors. While analysts view the strategic rationale positively, they caution that the high acquisition price requires successful execution of synergistic growth. Melio CEO Matan Bar expressed enthusiasm about the shared vision and potential for expansion.

Source: Reuters 
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