MYOB set to move into invoice financing in wake of Greensill collapse

MYOB chief executive Greg Ellis says the accounting software firm is undeterred by the collapse of Anglo-Australian fintech Greensill Capital as it prepares to expand into invoice financing for its small business customers.

The sudden demise of once high flying Greensill has captivated the global financial media in recent weeks. The firm, founded by Australian born Lex Greensill, provided a controversial service known as supply chain financing, buying invoices from big companies and paying their suppliers, often small businesses, early for a fee.

MYOB’s invoice financing business model is different, with the firm acting as a third-party financier that lets suppliers borrow money against their unpaid invoices. Under that model, platforms such as MYOB pay customers the value of their invoices, often within 48 hours, against a fee which can be up to 5 per cent of the invoice value. “Invoice financing to us is just one execution of managing cash,” said MYOB chief executive Greg Ellis. It’s “something that MYOB definitely will be in, and we’ll be in before the end of the calendar year.”

MYOB chief executive Greg Ellis is leading a move into invoice financing. Credit: Eamon Gallagher

MYOB’s major rival Xero already offers invoice financing since its $80 million acquisition of startup Waddle last year.

But Mr Ellis said the quality of MYOB’s customer base would set it apart from competitors: “We have a competitive advantage over many others in terms of the value of our customer base,” he said. “Xero has lots of customers, but the customers that have MYOB are generally older, more experienced, more valuable customers.”

MYOB is no longer listed on the ASX after it was bought by private equity firm KKR in 2019, so there is limited information available about its financial performance. Its most recent update reported 628,000 customers and records filed with the regulator for 2019 showed annual revenue of $401.7 million and a loss before tax of $18.9 million.

The company has been eclipsed by Xero, which last year reported 2.29 million customers, revenue of $NZ718.2 million ($661 million) and net profit of $NZ3.3 million.

Mr Ellis said MYOB has turned around since last year, when it cut 130 jobs as the coronavirus pandemic kicked in, and he was happy with the platform’s progress . Its enterprise resource planning (ERP) business was up 35 per cent on last year, its cloud-based SME customers rose 22 per cent and its invoice payments business was up more than 20 per cent, he explained.

While accounting was what MYOB was traditionally known for, “it won’t be the only thing that MYOB will be known for going forward.”

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