CBA’s latest digital acquisition promises to ease SMEs’ cashflow concerns

CBA Waddle acquisition

The Commonwealth Bank of Australia’s (CBA’s) venture-scaling arm, x15ventures will acquire the formerly Xero-owned invoice lending platform Waddle, with the bank expecting the integration to uplift its complementary Stream Working Capital service.

The bank has been partnering with Waddle since 2021 through its Steam Working Capital product – an end-to-end digital service that enables CBA business clients to use outstanding invoices as collateral.

Waddle effectively serves as the technology backbone of Stream Working Capital, which taps data from SMEs’ existing accounting platforms, including MYOB, QuickBooks and Xero, the former owner of Waddle.

This rollout of Stream was considered a first for a major Australian bank.

Waddle was initially acquired in late 2020 by accounting software firm Xero for $31 million. Xero earlier this year announced it would offload the platform as part of a major business restructuring and cost-cutting program.

CBA said the acquisition and full in-house integration of Waddle will enable the bank “to accelerate the growth” of its complementary Stream Working Capital service, with benefits to be gained through the platform’s “first-class automation and flexibility”.

The cloud-based technology, which includes a customer-facing portal, enables SME users to access up to 85 per cent of the money owed from unpaid invoices.

“Through acquiring the Waddle platform, we can continue to provide the best integrated digital working capital solution in the market and support more of our customers with faster funding assessments and approvals, said CBA group executive business banking, Mike Vacy-Lyle.

“This is a positive step in helping more Australian businesses to maximise cash flow and drive business growth.”

Toby Norton-Smith, Managing Director, x15ventures, added that the acquisition “will bring together a phenomenal product and distribution arm in Stream Working Capital, with the secure technology and operating environment of x15ventures, giving Waddle the flexibility and freedom to continue innovating at pace”.

Cashflow problems have persisted for many local businesses post-pandemic. Data from industry financier Optipay, released mid-last year, revealed that Australian businesses are waiting up to a week longer to pay their invoices compared to six months prior, with the average outstanding repayment time growing from 31 to 38 days.