Global small business platform Xero has entered into a binding agreement to acquire U.S.-based accounts payable platform Melio in a deal valued at $2.5 billion, with an additional $500 million in performance-based and time-linked incentives. This move significantly enhances Xero’s presence in the U.S. market and supports its 3×3 strategy focused on product, customer, and geographic growth.
Melio, founded in 2018, has emerged as a leading accounts payable (A/P) solution serving over 80,000 small and midsize businesses (SMBs) in the U.S., processing more than $30 billion in payments in FY25. The platform simplifies A/P workflows and offers flexible payment methods, empowering SMBs and their advisors with greater control over cash flow and operational efficiency.
The acquisition aligns directly with Xero’s goal to integrate accounting and payments into a unified experience. Melio’s capabilities will be embedded into Xero’s core platform, creating a powerful combination of accounting, bill pay, and syndication services for U.S. businesses. This integration is expected to immediately triple Xero’s North American revenue and average revenue per user (ARPU), positioning the company for sustained market expansion.
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“We’re thrilled to announce we’re acquiring Melio, a leading U.S. B2B payments platform that strongly aligns with our 3×3 strategy and U.S. growth ambitions,” said Sukhinder Singh Cassidy, CEO of Xero. “Adding Melio’s world-class team, technology platform, and innovative A/P solutions to Xero enables a step change in our North America scale and the potential to help millions of U.S. SMBs and their accountants better manage their cash flow and accounting on one platform.”
Melio also brings a robust syndication model, powering embedded payment solutions for platforms such as Capital One, Fiserv, and Shopify. This positions Xero to offer combined accounting and payments services to a broader base of SMBs through banking and SaaS partnerships.
Matan Bar, CEO and Co-founder of Melio, added, “Joining Xero is an incredible opportunity for the Melio team to further our mission to reinvent the way businesses pay each other. Having worked closely with the Xero team, we’re excited by our shared purpose to scale in the U.S. and combine Xero’s accounting capabilities with Melio’s accounts payable and receivable solutions to create comprehensive product offerings for our collective, valued customer base.”
Upon completion of the transaction, expected within six months subject to regulatory approvals, Matan Bar will lead the combined U.S. operations, overseeing the integration of accounting, payments, and partner networks to deliver an enhanced value proposition to SMBs nationwide.
The acquisition positions Xero for long-term growth, expands its revenue model to include transactions in addition to subscriptions, and reinforces its commitment to delivering smarter financial tools for SMBs globally.
