Financial management software producer Bill.com agreed yesterday to purchase payment management platform developer Divvy in a $2.5bn transaction enabling digital payment processor PayPal and electronics wholesaler Hanaco to exit.
Divvy’s software platform allows businesses to efficiently track spending on expenses and corporate cards in real time while setting flexible limits.
The deal will allow Bill.com to offer business customers accounts payable, accounts receivable and corporate card spend management options from a single place.
The deal will consist of $625m of cash and the rest in Bill.com shares. It comes four months after Divvy secured $165m in series D funding from investors including PayPal subsidiary PayPal Ventures and Hanaco at a $1.6bn valuation.
Whale Rock Capital Management, Schonfeld Strategic Advisors, Acrew Capital and existing investors New Enterprise Associates, Insight Partners and Pelion Venture Partners also took part in the round, which lifted the company’s overall funding to over $410m.
René Lacerte, founder and chief executive of Bill.com, said: “Customers have been asking us to help them with their spend management, and I am excited that together with Divvy, we can deliver on that ask, furthering our vision to transform SMB (small and medium-sized business) financial operations.
“Our expanded platform will provide more automation and real-time information to SMBs, enabling them to make more informed decisions.
“We are excited to work with the talented Divvy team. We have a shared passion for helping SMBs succeed and both companies are driving our customers’ digital transformations. Together, we can further empower SMBs to transition quickly and easily.”
Goldman Sachs is financial adviser to Bill.com on the deal while Fenwick & West is its legal counsel. Financial Technology Partners is Divvy’s strategic and financial adviser and Morrison & Foerster is providing legal counsel.
