Monchilla, the Seattle-based startup that offers online payroll management and payroll tax payments, has been acquired by Xero, a New Zealand-based online accounting firm. Monchilla sold for a combined $4.1 million in cash plus almost 240,000 shares of Xero stock.
“It was an obvious choice for us to join Xero and our combined expertise will ultimately help us build a more rounded out, intuitive payroll solution to fuel our customers’ growth,” Monchilla co-founder and CEO Jack Couch said in a press release.
The deal will give Xero more tools to accelerate the growth of its U.S. business to more customers. Right now, the company offers payroll services in seven states, and Monchilla’s tech will help boost that number very quickly.
Xero will integrate Monchilla’s technology into the company’s existing payroll business, and bring the startup’s team into the business.
Monchilla co-founders Jack Couch and Nanuan Shi will take up leadership roles inside the payroll team as a part of the acquisition. Monchilla’s customers will be supported independently on the company’s platform while the team works to integrate its tech into Xero’s existing products. Once that move is complete, customers will be transitioned over to Xero’s service.
“We like the Monchilla team’s straightforward approach to filing and paying payroll taxes,” Jamie Sutherland, the President of Xero’s North America division, said in a press release. “Combining this capability with the work our team is doing will enable Xero to develop a superior payroll experience for the U.S.”