ASX-listed accounting platform Xero is making its biggest North American move yet, announcing a binding agreement to acquire Melio, a U.S.-based B2B payments platform, in a deal valued at US$2.5 billion (A$3.8 billion).
The acquisition will allow Xero to embed integrated payments and accounts payable automation into its core offering for small and mid-sized businesses (SMBs), particularly in the U.S. market, where Melio has built strong traction among finance teams, bookkeepers, and accountants.
Founded in 2018, Melio simplifies accounts payable with a digital-first workflow, allowing SMBs to pay bills via ACH bank transfers, debit cards, or credit cards—even when vendors only accept checks. Its tools already integrate directly with accounting software, enabling faster reconciliation and cash flow visibility—capabilities Xero CEO Sukhinder Singh Cassidy sees as critical to the company’s long-term North American strategy.
“Xero and Melio are highly complementary,” Singh Cassidy said. “Together they complete the key jobs to be done for US SMBs, extend reach across customer segments, provide both direct and syndicated offerings, and deliver multiple revenue drivers.”
In addition to the base price, the deal includes up to US$500 million in contingent consideration, deferred compensation, and equity rollovers payable over three years, tied to Melio achieving specific performance targets. The transaction is expected to close within six months, pending regulatory approvals.
Matan Bar, CEO and co-founder of Melio, called the deal “an incredible opportunity” to scale Melio’s mission of reinventing how businesses pay each other.
“Having worked closely with the Xero team, we’re excited by our shared purpose to scale in the US and combine Xero’s accounting capabilities with Melio’s accounts payable and receivable solutions,” Bar said.
Xero has been aggressively investing in embedded financial services as it looks to turn its accounting platform into a full-stack digital finance engine for SMBs. Melio’s technology gives it an immediate boost in B2B payments infrastructure, a market that continues to be underserved despite massive fintech investment in the consumer and enterprise segments.
Xero said it plans to retain Melio’s team and brand while integrating key product capabilities across its global platform—especially in the U.S., where it has historically lagged behind larger competitors like QuickBooks.