There seems to be a major accounting technology acquisition or merger at the end of each year, and in 2024 it came in the form of IRIS’s intention to purchase Dext for £500M (US$636M). I, of course, have thoughts.
The official news reads like this (and I’m basically summarizing): IRIS Software Group (IRIS), a global provider of accountancy, education management, HR, and payroll solutions, on December 3 announced a definitive agreement to acquire bookkeeping automation platform provider Dext Software Ltd. (Dext).
On one side of the accounting value chain, IRIS Elements supports accountants and businesses with practice management and compliance functionality, such as accounts production and tax returns. On the other, Dext simplifies bookkeeping and improves productivity by automating routine tasks with AI. Together, both companies will cover the entire end-to-end accountancy workflow, from data entry and processing to compliance, reporting, and advisory services.
The ultimate goal with this acquisition, according to both companies, is to create a single, end-to-end view of the entire accountancy workflow. By expanding the global digital footprint in countries like the UK, Canada, France and Australia, the acquisition will also support accountants in staying ahead of rapidly evolving global regulatory and compliance requirements.
The transaction will also allow IRIS to accelerate Dext’s product roadmap, infuse additional capital, and enhance its partner integration program, which already connects to over 35 bookkeeping software platforms and over 11,500 banks & financial institutions. Both IRIS and Dext share a general ledger (GL)-agnostic strategy, ensuring their platforms can integrate with a wide array of accounting software and every bookkeeping provider—connecting multiple workflow streams and providing customers with unparalleled freedom of choice. Accountants and bookkeepers will have the flexibility to use their preferred bookkeeping tools while enjoying the benefits of a smooth, cohesive user experience.
Sounds good, right? My take, essentially, is yes, on paper this is a very good thing for Dext. Anything that gives them a more global reach, capital to make the moves they need to, and support for R&D and overall growth and brand reach is not a bad thing.
My concern here is that perception in the accounting market is a huge hurdle and often a major factor in a brand’s success in a particular market. To that end, IRIS does not have a great track record of continuing to support the brands it acquires. The most recent example of this is AccountantsWorld.
Predominantly a US brand, AccountantsWorld was a first mover in browser-based accounting technology. Not only that, they were an avid marketer with ads and content campaigns appearing in all accounting industry publications, as well as their presence at multiple accounting industry events.
Since the IRIS acquisition back in 2021, this has rarely been the case, and while I know the platform continues to be used by many dedicated firms, their overall visibility is all but non-existent. One could argue similarly for another North American acquisition, Doc.It, which IRIS purchased earlier that year.
My whole point is Dext has been working hard to grow in the North American market, and it would be a shame if their visibility faded as well. I focus on this aspect of awareness because I know well that in the accounting space, being seen and heard from, in short, being “present,” is something that is essential for growth in the accounting profession. Here is hoping IRIS is indeed able to help Dext with that in the North American market.