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Cloud invoice finance solution Waddle is changing hands for the second time in just over three years after Commonwealth Bank of Australia (ASX: CBA) announced the Sydney-based fintech would be acquired by its venture-scaling arm x15ventures for an undisclosed sum.
Founded by school friends Nathan Andrews, Simon Creighton and Leigh Dunsford in 2015, Waddle helps small businesses manage gaps in cash flow by providing a flexible line of credit based on their invoices, while automating many aspects of invoice financing for the lenders themselves.
It is a proposition that saw Waddle acquired by one of Oceania's largest accounting software businesses, New Zealand-headquartered Xero (ASX: XRO), in August 2020.
Within a year of that purchase, Waddle entered into its first major Australian bank partnership with CBA to develop and launch an offering known as Stream Working Capital, laying the groundwork for today's announced transaction.
At the time in June 2021, CBA Business Banking group executive Mike Vacy-Lyle noted the offering would "allow customers to access funds by using their outstanding invoices as loan security".
As a self-service platform, the technology draws on live feeds of customer data via cloud accounting software offerings like Xero, MYOB and QuickBooks, and can be integrated to give an easily reconciled source of truth. It enables funding for up to 80 per cent of the value of outstanding invoices.
x15ventures expects completion of the acquisition is set to occur "reasonably soon" according to the bank.
"We launched Stream Working Capital as a digital solution to use outstanding invoices as loan security, with the loan size reducing as invoices are paid. This digital end-to-end solution was a first for a major Australian bank," Vacy-Lyle said today.
"Through acquiring the Waddle platform, we can continue to provide the best integrated digital working capital solution in the market and support more of our customers with faster funding assessments and approvals.
"This is a positive step in helping more Australian businesses to maximise cash flow and drive business growth."
x15ventures managing director Toby Norton-Smith said the acquisition was a great opportunity to maximise existing CBA investments for the benefit of its customers.
"This will bring together a phenomenal product and distribution arm in Stream Working Capital, with the secure technology and operating environment of x15ventures, giving Waddle the flexibility and freedom to continue innovating at pace," Norton-Smith said.
"We set up x15ventures so that digital native businesses can operate how they’re used to – both culturally and technically – while also getting access to the assets and reach of one of Australia’s leading banks.
"We look forward to welcoming Waddle to x15ventures and helping them continue to realise their ambitions to scale and support more small businesses."
A Xero spokesperson confirmed that Nathan Andrews left the business late last year. Neither Waddle nor CBA has yet been able to confirm whether Simon Creighton will remain as a director of the company post-transaction.
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