While neither Sage nor Lockstep disclosed the terms of the purchase, which is anticipated to be completed in September, it is unlikely to have come cheap given that Lockstep conducted a $10M Series A raise in February 2021, with a further $2.5M injected by American Express Ventures in August 2021.
Founded in 2019 and based in Seattle, Washington, Lockstep lets accounting teams manage and automate receivables and payables workflows in one place, promising to ‘improve efficiency and cashflow’.
The Lockstep platform enables network connections to more than 40 different accounting solutions through an open API, including Infor, Microsoft Dynamics 365, Oracle NetSuite, QuickBooks, Sage and SAP, and the company states that more than 26,000 businesses are part of its ecosystem. Its free Lockstep Inbox product also sluices company email data into accounting software, allowing users to prioritise customer or vendor communications, automate reminders and visualise key accounting metrics.
The acquisition is the latest in a trail of cloud-native purchases for Sage. Most recently the Newcastle-based software house added small business cashflow forecasting software Futrli to its roster of products, following the purchase of pricing and onboarding app GoProposal and data and expense capture tool AutoEntry.
All 130 Lockstep employees will transfer across to Sage, with Lockstep co-founder and former CEO Peter Horadan reporting to Sage’s Chief Technology Officer Aaron Harris.
Commenting on the acquisition Harris, himself brought to the company through the $850m acquisition of Intacct, said the purchase of Lockstep represented “an important milestone” in the developer’s growth strategy.
“[Lockstep’s] complementary portfolio of products, resources and know-how accelerates our ambition to be the trusted network for SMBs,” said Harris. “Working together we will continue to knock down the barriers that limit CFOs and accounting teams by streamlining their workflows, improving productivity and efficiency, and enabling them to focus on more valuable, human work.”
Horadan added: “Together with Sage, we look forward to accelerating the development of connected accounting which is imperative for accountants, finance teams and the companies they serve.”
Dermot Hamblin managing director of consultants Langdon Hamblin, told AccountingWEB that the acquisition puts further emphasis on Sage’s push into medium section of the small to medium business (SMB) market.
“The recent financials Sage released are hard to decipher, but we can see that SMB is giving Sage a lot of growth and this is driven by Intacct,” said Hamblin.
John Toon, tech strategy lead at UK firm Beevers and Struthers said the acquisition proves two points: “Firstly, Sage has the financial muscle to continue to acquire, and secondly it is evidence that they are delivering on the public commitment to build cloud ecosystems for the segments they deliver to.”