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Highlights
- Xero completes major funding round for Melio acquisition
- Share purchase plan announced for eligible retail investors
- Strategic move enhances Xero’s U.S. market presence
ASX-listed accounting software company Xero (ASX:XRO), a key player among ASX200 stocks, has made a bold strategic move by securing A$1.85 billion through a fully underwritten institutional placement. This capital raise is set to support its proposed US$2.5 billion (A$4 billion) acquisition of U.S.-based payments platform Melio, strengthening its footprint in the financial technology sector.
The placement, which saw shares issued at A$176 per share, involved approximately 10.5 million new fully paid ordinary shares. These shares will settle on June 30, 2025, with normal trading commencing from July 1, 2025. Existing institutional shareholders who bid within their pro-rata entitlements received full allocations on a best-efforts basis.
Alongside the institutional funding, Xero has announced a non-underwritten share purchase plan (SPP) aimed at eligible retail investors. This plan provides shareholders the chance to invest up to A$30,000 without any transaction or brokerage costs. The issue price for the SPP will be the lower of the placement price or a 2% discount to the five-day volume-weighted average price (VWAP) up to the closing date of July 21, 2025. The SPP booklet will be distributed on or around July 2, 2025, with the funds intended to support general corporate and working capital requirements.
The acquisition of Melio marks a significant step for Xero’s international expansion. Founded in 2018, Melio has rapidly scaled, offering cash flow, accounts payable, and receivable management tools to more than 80,000 U.S.-based small and medium businesses. In FY25, Melio reported US$153 million in revenue, supported by a compound annual growth rate of 127% since 2021.
Melio’s technology is already integrated with several major financial institutions and platforms, including Shopify, and is distributed via partners such as Fiserv. This acquisition aligns with Xero’s ambition to strengthen its platform capabilities and gain broader access in the U.S. market.
Xero’s leadership has expressed optimism about the integration of Melio’s team and the potential for joint innovation. With this acquisition, Xero not only expands its ecosystem but also deepens its relevance in the global fintech landscape—further enhancing its position among ASX200 companies.
