If you own Commonwealth Bank of Australia (ASX: CBA) shares, then you may be interested to know that Australia's largest bank has made an acquisition this week to boost its digital lending capabilities in business banking.
This may be seen as an attempt to close the gap on business banking leader National Australia Bank Ltd (ASX: NAB).
What has CBA acquired?
CBA has announced that its venture-scaling arm, x15ventures, has entered into an agreement to acquire the cloud-based invoice lending platform Waddle from Xero Limited (ASX: XRO).
The bank already has an existing partnership with Waddle through its Stream Working Capital product. It allows the bank's business customers to unlock cash tied up in unpaid invoices with a digital cash flow solution connected to business accounting software like Xero, MYOB and QuickBooks.
However, by acquiring Waddle, CBA notes that it brings the technology in-house and will enable the bank to accelerate the growth of its Stream Working Capital product while continuing to benefit from the first-class automation and flexibility the Waddle platform is known for.
CBA's group executive of business banking, Mike Vacy-Lyle, said:
Access to working capital is vital for many businesses and Stream Working Capital offers greater flexibility, simplicity and faster access to cash flow. We launched Stream Working Capital as a digital solution to use outstanding invoices as loan security, with the loan size reducing as invoices are paid. This digital end-to-end solution was a first for a major Australian bank.
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. This is a positive step in helping more Australian businesses to maximise cash flow and drive business growth.
How much has CBA paid?
CBA hasn't revealed how much it has agreed to pay for Waddle.
While Xero paid $80 million for the business back in 2020, it did recently announce NZ$48.5 million of impairments and other costs related to Waddle.
CBA shareholders will no doubt be hoping that the business has more success under the bank's ownership.
