28 May 2024
Xero needs no introduction. The global small business platform is arguably the best-known and indisputably the only billion-dollar Kiwi fintech. Founded by Rod Drury in 2006 and led by Sukhinder Singh Cassidy, the company is continuing to rapidly expand – and it says that is mostly down to the strength and breadth of its partnerships.
Xero’s sheer variety of partnerships is notable. It offers access to an ecosystem of more than 1,000 connected apps and 300 connections to banks and other financial institutions, including to API providers that then provide access to additional banks and financial institutions.
Jeremy Butteriss, Executive General Manager for Ecosystem and Partnerships, explains why partnership is not just Xero’s past, but also its future.
GROWING TOGETHER
It’s often remarked that Xero was the first accounting platform “born in the cloud”. But as Butteriss remarks, “It’s also the first to be API-first and partnership-first.” Across the entire Xero ecosystem there are more than 20,000 integrations, beyond its apps.
By making its platform open and easy to bring data in and out of, Xero was able to grow its base of accounting and bookkeeping partners, and consequently its general small business customer base – as well as the customer base of those accountants. Meanwhile developers and app partners who plugged into Xero’s API could tap into Xero’s customer base.
Butteriss comments, “I think that’s another key value proposition for partners. Many will connect with Xero because they want to make our shared customers’ lives easier, but many more like working with Xero because they can grow their business with us.” Xero’s ecosystem has always been open for other developers to connect to – but part of it’s now also been commercialised. In 2021, Xero launched the Xero App Store, offering subscribers an easier way to discover and buy apps on the Xero platform, while giving developers a way to increase adoption of their apps.
Butteriss explains: “The idea there is that we’re like an operating system – we have a lot of native Xero products, but we also allow a lot of other services to integrate with our operating system and those native products. Increasingly, you’ll see us choosing from some of those ecosystem partners and more deeply embedding them in Xero which is really exciting.” Deeply embedded partners currently include paytechs like Stripe and GoCardless and bill pay software like UK firm Crezco or US group BILL – the lattermost having just been recently announced. “Partnerships also allow Xero to fill a lot of gaps quickly so it is an area we’ll continue to focus on.”
Xero invests significantly in onboarding new app partners and helping them grow and attract new customers. They do this by increasing the visibility and discoverability of the Xero App Store, and by equipping the Xero team with the right information to support small businesses.
Butteriss is passionate about this. “We do take this responsibility seriously. Ecosystems need to be circular and have reciprocal value. So if we expect developers to integrate with our APIs and list their offerings, we should be willing to help them increase adoption levels.”
Xero is particularly committed to lifting up its Kiwi friends. “There’s a natural desire to want to do that if you’re a company born in Aotearoa New Zealand. We have an amazing opportunity to help other Kiwi companies go global, just because of the markets we’re in and the relative domestic opportunity.”
For example, Cin7, Unleashed, and Vend all grew in sync with Xero (see report here).
THE HOST OF THE (MULTI)PARTY (WORKFLOW)
The whole point of these partnerships though, is to make life easier for the end customer: a small business owner. Butteriss says, “It can be challenging if you’re a small business: some have multiple pieces of software and are having to switch between programs and tabs to find common records, it’s such a pain. So, the question was: how we can help small businesses use the right software to complete tasks and centralise records, all from within the Xero platform?”
These partnerships will allow Xero’s customers to access best-of-breed technology without leaving the Xero platform to do things like schedule and execute payments.
Butteriss says, “I think we’re just in the early days. Once we put AI to some of this, your workflows won’t just be easier to manage, but it’ll be easier to construct automatic multi-party workflows within the platform. There are really exciting times ahead.”