The deal comes at a time when large technology companies have been scouring the landscape for new sources of revenue. For example, Starbucks recently announced it will be exploring blockchain technology for payments.
Bill.com Smbs Barrononline has been in the payment business since 2011 and offers its software to small businesses in 120 countries and 21 languages, selling everything from simple invoicing solutions to sophisticated expense management tools. Divvy provides SMBs with an easy-to-use expense application that runs on any website through an API that is nearly instantaneous.
Under the terms of the deal, Bill.com will pay $1.5 billion in cash and $1.5 billion in stock for Divvy, with a commitment to pay an additional $750 million if Divvy meets certain performance targets. The transaction is expected to close during the first quarter of 2020, following customary closing conditions and regulatory approvals.
Under the terms of the deal, Bill.com Smbs Barrononline will pay $1.5 billion in cash and $1.5 billion in stock for Divvy, with a commitment to pay an additional $750 million if Divvy meets certain performance targets. The transaction is expected to close during the first quarter of 2020, following customary closing conditions and regulatory approvals.
Following the closing of the merger, Bill.com’s management team will retain control over both companies. Under the terms of the deal, Bill.com will be led by founder and CEO Jeffrey Garfield and Divvy’s leadership team will continue to be led by CEO Kerry Crowe.
“There are hundreds of millions of small businesses that have never benefited from cloud-based business solutions to run their business without having to have a full time team on site,” said Garfield. “Because of this, SMBs have been overlooked for years: Bill.com is changing that. We’ve built the best cloud-based business platform on the planet and we’re just getting started. Divvy is a perfect complement to our core payments business, bringing us into new markets and solving the challenges of SMBs to run their businesses on a daily basis. We get to focus on payments while Divvy gets to focus on a solution that will be able to drive these businesses forward.
“This company has a great product and has been doing it for years without needing to raise capital or find customers. We believe that Divvy is a solution that countless SMBs have been waiting for. It’s a good fit for Bill.com Smbs Barrononline, and we’re excited to welcome them onboard.”
Starting from scratch in 2017, Bill.com launched with the belief that small business owners should be able to work from anywhere on their laptop or phone without having to hire tech teams full time.
“This company has a great product and has been doing it for years without needing to raise capital or find customers,” said Garfield. “We believe that Divvy is a solution that countless SMBs have been waiting for.”
Divvy was founded in 2010 by Kerry Crowe and James Johnson, who have previously founded software companies with notable exits such as VoIP pioneer Bandwidth (Bandwidth was acquired for $600M by Level 3 in 2005) and enterprise software company Sandhill Exchange (acquired by Fair Isaac Corporation in 2002).
“Divvy is changing the way that businesses manage their finances and accounting, introducing an entirely new approach to expense management,” said Crowe. “We’re excited to launch our solution into small business communities that are hard-pressed to find a solution at all — this will change the way they do business.”
