Xero has announced its investment of US$25 million to acquire a minority stake in Deputy, a local HR application. This move aims to integrate Deputy’s workforce management tools into Xero’s platform. Concurrently, Xero has confirmed its decision to retire its Planday product in Australia.
CEO Sukhinder Singh Cassidy explained that the shift to Deputy in Australia aligns with Xero’s FY25-27 strategy, emphasizing the optimization of resource allocation to achieve optimal outcomes for customers, Xero, and stakeholders.
Xero’s acquisition of Planday comes three years after establishing a partnership for €183.5 million in 2021, marking it as the company’s largest acquisition to date. Initially serving European markets such as the UK, Scandinavia, France, and Germany, the deal expanded Planday’s operations to Australia and New Zealand.
The closure of Planday’s operations in Australia will result in an immaterial write-down in FY25 of previously capitalized costs associated with Australian product development, according to Xero.
Singh Cassidy noted that Planday will redirect its efforts toward its core European markets to maximize subscriber growth and customer value creation opportunities.
Xero aims to deepen its integration partnership with Deputy to bring workforce management technology to its Australian customers through its platform. This partnership involves embedding Deputy’s capabilities into Xero Payroll, making payroll and workforce management more streamlined for Australian customers.
In addition to the partnership, Xero has purchased a US$25 million minority stake in Deputy to enhance focus and alignment between the two companies.
Deputy CEO Silvija Martincevic expressed excitement about the strategic partnership, emphasizing shared values of product excellence, innovation, and serving the needs of small businesses. Martincevic believes that this collaboration will empower hundreds of thousands of businesses across Australia with the necessary tools to thrive in today’s dynamic business landscape.
