Exclusive: Business payments firm AvidXchange preps for IPO, eyeing $7 billion valuation - sources

David French
·2-min read

By David French

(Reuters) - AvidXchange Inc has hired investment banks including Goldman Sachs Group to lead preparations for an initial public offering which may value the business payments processor at more than $7 billion, people familiar with the matter said on Tuesday.

Backed by investors including Mastercard Inc and PayPal Holdings Inc co-founder Peter Thiel, AvidXchange provides software that automates payments, invoicing and accounting for small and mid-sized businesses.

COVID-19 lockdown measures have forced smaller companies to embrace digital solutions for everyday, paper-heavy tasks, a trend which has boosted businesses such as AvidXchange.

Seeking to capitalize on that momentum, the Charlotte, North Carolina-based company aims to list on the stock market in the second quarter. As well as Goldman, JPMorgan Chase & Co, Bank of America Corp, and Barclays PLC have been retained as IPO arrangers, according to two of the sources.

Those involved in the deal believe AvidXchange could be worth between $5 billion and $7 billion in an IPO, and potentially as much as $10 billion given recent strong investor appetite for payments companies, the sources said.

This would be considerably higher than the $2 billion AvidXchange was valued at in its most recent private fundraising round in April, 2020.

The sources spoke on condition of anonymity as the information is private. AvidXchange declined to comment. Spokespeople for the quartet of banks either declined to comment or didn't immediately respond to comment requests.

Founded in 2000, AvidXchange processes around 12 million payments annually with a total value of $140 billion, according to its website.

Values of financial technology firms have boomed in the last 12 months, both for public and private names. AvidXchange's listed peers, Bill.com Holdings Inc and Coupa Software Inc, have advanced more than 300% and 89% respectively over that period.

Earlier this month, Swedish payments firm Klarna announced a new funding round at nearly triple its valuation from when it tapped private investors in September.

(Reporting by David French in New York; Editing by Alexandra Hudson)