Xero grabs Tickstar in £12.5m e-invoicing playby
In its second acquisition this month, Xero bought e-invoicing and infrastructure provider Tickstar. It may not be relevant now, but before long e-invoicing will be more important to UK customers, according to Xero's Gary Turner.
Xero has snapped up its second ecosystem victim this month, buying e-invoicing infrastructure provider Tickstar for £12.5m. The deal follows its acquisition of workforce management platform Planday earlier in March.
The Sweden-based company hosts an e-invoicing infrastructure platform that connects businesses to other e-invoicing networks across the globe. Tickstar will function as a Xero subsidiary and will continue as before with its platform-independent Galaxy Gateway e-invoicing service and external consulting team, but will benefit from added resources from Xero to expand its business.
The Tikstar functionality, however, “will be integrated deeply within Xero so it will be presented as inherent capability of Xero”, said Xero UK co-founder and managing director Gary Turner. “This acquisition [will] accelerate our readiness for when e-invoicing becomes a more pressing concern – which we’re pretty sure is on the horizon.”
Xero accounts already support this function in Australia, New Zealand and Singapore.
E-invoicing as a means by which large organisations manage their invoices is not new and is likely to gain in adoption and mandation in the next decade, according to Turner. “So when we were looking at that landscape, we determined that having an e-invoicing capability inside of Xero was inevitable... Tickstar ticked all the boxes,” he said.
E-invoicing: UK and global relevancy
Turner was at pains to rein expectations that Tickstar would be instantly relevant to the UK market, but other markets that Xero serves like Singapore, Australia and New Zealand have already gone down the e-invoicing.
Singapore is currently rolling e-invoicing out through its entire economy. Australia and New Zealand are behind Singapore's progressiveness but are still decidedly going down the route of e-invoicing. Brazil and China’s governments have also introduced their own online invoice registers to ensure better sales tax compliance.
“The technological models may differ, but the essential principles will still be relevant, even if the infrastructure is government-owned,” explained Turner. “As well as the Tickstar infrastructure, we’ve acquired the intellectual property, access points and expertise to make thosee connections.
“The work HMRC has done around tax compliance with Making Tax Digital has been based on open programming interfaces and there’s now Open Banking. So I would be surprised if any e-invoicing strategy wasn’t open,” he added.
Xero’s acquisition of Tickstar will supplement rather than compete with other payment integrations in Xero’s ecosystem, Turner explained.
Where integration with Wise (previously TransferWise) lets Xero users manage outgoing payables more conveniently and cheaply, the Tickstar invoicing platform will standardise the way suppliers submit their invoices. The latest acquisition will allow Xero to hosts its own invoicing access points, removing the need for any third-party provider.
“E-invoicing is not payments or payables, but handles the delivery of the invoice in the first place,” he said. “If you’re my customer and I send you an invoice from inside Xero, I can embed Stripe or PayPal in the invoice to invoke a payment capture process.”