“Syft is a well-established and highly rated app – 4.8 out of five stars on the app stores of Xero and Intuit – that provides powerful capabilities, including financial forecasting,” Craigs’ Stephen Ridgewell told the Herald.
“This looks to us like a smart bolt-on acquisition,” Ridgewell added.
“Interestingly, Xero has decided it is better to buy than to build in this case – a departure from the previous ethos at the company to largely DIY, and a change in approach to R&D that had been signalled at its investor day in February.”
Xero said it would continue to sell Syft’s product standalone, but also add its financial forecasting capabilities to its own higher-priced monthly plans over time.
“That should support Xero’s medium strategy to drive Arpu [average revenue per user] growth by up-selling existing subscribers from lower value to higher value plans,” Ridgewell said.
Harbour Asset Management’s Shane Solly said Syft’s focus on analytics gelled well with Xero’s desire to push into AI.
“It’s a good bolt-on acquisition. Syft is a ‘built’ business ready to grow.”
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.