June 20, 2019
On June 11, 2019, H&R Block Inc. (H&R Block), the international tax preparation giant, announced that it had entered into a definitive agreement to acquire Wave Financial Inc. (Wave) for CAD$537 million. The acquisition would be one the largest Canadian tech exits to date, adding Wave to the top 10 on the Canadian Tech Exit Leaderboard along with Shopify, Kobo, and others.
Founded in 2009, Wave is a financial planning platform for small businesses serving more than four million customers in 200 countries worldwide. For H&R Block, the acquisition will allow for expansion into the small business market and will help grow its client portfolio by introducing Wave’s accounting, invoicing, payroll and payments software solutions. Wave co-founder Kirk Simpson sees the deal as an opportunity to scale the Wave platform and deliver more value for customers by integrating H&R Block’s tax solutions into the platform. Though Simpson will now report directly to H&R Block CEO Jeff Jones, Wave will continue to operate independently, with the existing structure remaining intact.
To Simpson, the deal represents an indication of the health of the tech sector in Canada, and a harbinger for similar deals in the future. He stated, “Our hope is that…this kind of exit and liquidity means that our early venture capital partners will be deploying capital into the next round of startups, and some of our early angels will take that liquidity and once again reinvest into tech startups, and some of our early employees will do the same. I think that’s really good for the ecosystem.”
Author: Kyle Jacobson