Bill.com has signed a definitive agreement to acquire spend management startup Divvy in a transaction valued at around $2.5bn.
As agreed, Bill.com will pay $625m in cash and $1.875bn of company common stock as consideration.
Notably, Divvy was valued at around $1.6bn after it secured $165m in a funding round in January.
Divvy helps businesses to modernise finance operations by combining expense management software and smart corporate cards into a single platform. It is headquartered in Draper, Utah.
The acquisition will expand market opportunity for both companies.
Bill.com will be able to offer expense management and budgeting software along with smart corporate cards to its customer base and member network. Divvy can provide automated payable, receivables and workflow capabilities to the more-than 7,500 monthly active SMBs.
The expanded solution will enable customers to manage all B2B spending in one place. The businesses will also gain real-time insight into all their B2B expenditure and access to multiple payment solutions.
Bill.com CEO and Founder René Lacerte said: “Since founding Bill.com, I have been driven by the desire to build solutions that make a real difference for small and mid-sized businesses.
“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 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.”
The acquisition is expected to close by 30 September 2021, subject to regulatory approvals and customary closing conditions.