Bill.com / Divvy 2021
Bill.com acquired Divvy for $2.5B on May 6, 2021.
- Target
- Divvy
- Acquirer
- Bill.com
- Deal value
- $2.5B
- Deal type
- Mixed
- Announced
- May 6, 2021
- Sub-sector
- Vertical SaaS Payments
Transaction overview
- Bill.com announced the acquisition of Divvy on May 6, 2021 for approximately $2.5 billion.
- Consideration was roughly 80% stock and 20% cash, subject to adjustment.
- The deal closed on June 30, 2021.
- Divvy is a Utah-based spend management platform offering corporate cards and budgeting software to SMBs.
- Divvy processed over $1 billion in annualized payment volume at the time of announcement.
- Bill.com operates a cloud-based financial operations platform for small and midsize businesses.
- The acquisition added corporate card and expense management capabilities to Bill.com's accounts payable and receivable product.
Why it matters
- The deal was one of the largest acquisitions in SMB fintech in 2021, combining AP/AR automation with corporate card spend management.
- Bill.com's purchase price represented a significant step-up from Divvy's last private valuation of approximately $1.6 billion.
Strategic rationale
Bill.com acquires SMB spend management and corporate card platform to pair AP automation with employee-facing spend controls.
Deal terms & multiples
About Divvy
Divvy is a spend management company founded in 2016 and headquartered in Lehi, Utah. The company offers corporate charge cards paired with budgeting and expense management software, targeting small and midsize businesses. Divvy's revenue model relies primarily on interchange fees rather than software subscription fees, which differentiated it from most SaaS competitors. At the time of the acquisition, Divvy had grown to several hundred employees and was processing over $1 billion in annualized payment volume.
- Founded
- 2016
- HQ
- United States
- Prior funding
- Approximately $500 million raised across multiple rounds, including a $165 million Series D in 2021 at a ~$1.6 billion valuation
- Key metric
- Over $1 billion in annualized payment volume at announcement
About Bill.com NYSE: BILL
Bill.com is a cloud-based financial operations platform for small and midsize businesses, founded in 2006 and headquartered in San Jose, California. The company automates accounts payable and accounts receivable workflows, processing payments between businesses and their suppliers or customers. Bill.com went public on the New York Stock Exchange in December 2019 under the ticker BILL. By the time of the Divvy acquisition, the company had a market capitalization exceeding $10 billion.
- Founded
- 2006
- Ticker
- NYSE: BILL
Frequently asked questions
How much did Bill.com pay for Divvy?
Bill.com paid approximately $2.5 billion, split roughly 80% in stock and 20% in cash.
When did the Bill.com and Divvy deal close?
The acquisition closed on June 30, 2021, about eight weeks after the May 6 announcement.
What does Divvy do?
Divvy provides corporate charge cards and budgeting software to small and midsize businesses, earning revenue primarily through interchange fees.
Why did Bill.com acquire Divvy?
Bill.com wanted to add corporate card and spend management capabilities to its existing AP and AR automation platform, broadening its product for SMB finance teams.
What was Divvy's valuation before the acquisition?
Divvy's last private funding round in early 2021 valued the company at approximately $1.6 billion, below the $2.5 billion acquisition price.
Is Divvy still operating as a separate product after the acquisition?
After the acquisition, Divvy's product was rebranded and integrated into Bill.com's platform as BILL Spend & Expense.
Sources
- techcrunch.com /2021/05/06/why-did-bill-com-pay-2-5b-for-divvy/