Loading

“So when you think about Xero the platform, it’s not just small business accountants and bookkeepers, banks and app providers, but there are also suppliers to small business, customers of small business and employees of small business” that can start using Xero as a platform, he said.

He added the acquisition also introduced Xero to Planday’s enterprise customers, which typically included sites with up to 150 employees that were part of larger organisations.

Mr Vamos would not detail whether Planday would be fully integrated into Xero’s platform and sold as part of Xero’s overall package, but said his company continued to place a high value on its app network of more than 800 developers, including competitors to Planday.

“We will provide third-party application developers with lots of opportunity to continue to do what they’re doing connecting to Xero,” he said.

Xero’s acquisition of Planday is expected to be completed in the first quarter of the financial year and to contribute approximately 3 percentage points of additional operating revenue growth for Xero for the year.

RBC Capital Markets analyst Garry Sherriff said the deal was in line with Xero’s strategy to acquire complementary partners that have strong traction with small and medium business customers.

Mr Sherriff said the deal was “comfortably funded” by the proceeds from Xero’s upsized convertible note that it issued in November last year.

“[It] appears to be a logical fit with Xero’s platform, as workforce management [is] a critical pain point for SMEs,” he said.

Tech stocks in the United States have been under pressure recently as bond yields rise and local tech firms haven’t been immune, with Xero’s share price down from a high of $152.71 in January. But Mr Vamos said he was focused on sticking to the company’s long-term strategy.

“The only thing that matters is the focus on the long term and value for customers,” he said.

“We keep focusing on the things that we can do to help our customers and everything else takes care of itself really.”