AvidXchange has become a highly valuable business-to-business payment service provider that helps small and mid-sized businesses manage their payment activities. The Charlotte-based company has attained support from many entities, including MasterCard, PayPal, and various others. The company’s work helps automate various financial activities, from creating invoices to sending payments. It also provides accounting help for businesses that need extra help in maintaining their financial records.
AvidXchange is now looking to establish an initial public offering or IPO. Reuters reports that the IPO could give the company a valuation of up to $7 billion.
AvidXchange is working with many prominent entities to prepare its IPO. It is working with Goldman Sachs, Bank of America, Barclays, and JPMorgan Chase to get its IPO ready.
The company’s value has been rising over the past year, as people are quickly turning to digital payments. The ongoing pandemic has forced many businesses that use paper-based processes to go to digital-based approaches.
The company is expected to have a high value for its IPO. AvidXchange has become a necessity for many businesses, and its upcoming value is expected to show this point. When the IPO is made available remains unclear, but it will be something that remains in demand for investors.
About AvidXchange
AvidXchange was formed in Charlotte in 2000. The company manages automated invoicing activities for business clients. The AvidXchange platform gathers accounting information and provides thorough clarity for businesses looking to manage their payrolls, invoices, and other charges.
AvidXchange has a network of more than half a million suppliers. The company processes its transactions over this network to support thousands of business clients looking for help with their money needs.
AvidXchange has a thorough infrastructure with more than 1,500 employees working in seven office locations, including ones in the Houston and Salt Lake City areas. Most of the company’s activities occur in the United States, but its global reach is expected to increase as more people become aware of what AvidXchange offers.
The company’s revenues have been rising in the last few years. The company saw an estimated revenue of about $145 million in 2017. Information on how much revenue the company has received since then remains unclear, but the business is still raising immense amounts of money.
What Is the Value Range?
While the IPO for AvidXchange is expected to be about $7 billion, the value is expected to vary. The IPO could be as small as $5 billion, or it could be up to $10 billion. The demand that investors hold will influence the potential IPO value.
Whatever the case, the IPO value will likely be significantly higher than what AvidXchange was valued at a year earlier. The latest fundraising effort for AvidXchange in April 2020 produced a value of about $2 billion. The company also saw another fundraising project in January 2020, but that was worth $260 million.
How Does It Compare?
To understand the potential of AvidXchange’s value, it helps to compare the company with other industry contenders. Bill.com has seen its value rise by more than 300 percent in the past year. Coupa Software has also seen its value increase by nearly 90 percent in that time.
The Swedish company Klarna is also competing with AvidXchange and continuing to grow. Klarna is in a funding campaign with a valuation nearly triple its original value from when it last contacted investors for help in September.
These numbers suggest that AvidXchange will likely become more popular and viable for business sales. The IPO will already be worth billions of dollars, but whether the IPO will reach the eleven-digit value range remains unclear.
Still Important
One valuable part of AvidXchange comes from how the service still remains important for everyone to use. AvidXchange’s website says that the company handles more than twelve million payments each year. These payments total around $140 billion.
AvidXchange CFO Joel Wilhite continues to lead the company. He has argued that companies must know how they can manage business continuity efforts during uncertain situations like the ongoing pandemic. He also says that technology is making it easier for businesses to pivot and stay operational. Understanding the many scenarios and situations that might develop can be critical to success. The AvidXchange system makes it easier for businesses to review new situations and to adapt to them as necessary.
The potential for businesses to go back to traditional paper-based platforms for invoices and other pieces of data is questionable. Businesses may demand digital solutions that are easier to analyze and plan as necessary. AvidXchange will be there to assist companies in handling whatever tasks people wish to manage for their invoices.
Expect AvidXchange to remain an exciting solution for future business activities. The demand for services will likely cause AvidXchange to be more valuable for investors to explore.
What Will Happen?
All parties talking about the AvidXchange IPO plans have been speaking on anonymity. The company itself is not speaking about the point. The banks working on producing the IPO are not talking about anything either.
The specific timing for when the IPO will be available also remains unclear. IPOs can take weeks or even months to complete. IPOs are factored over the current assets a business has, its potential for growth, and the possible demand people might have for the investment. The analysis process will require extensive work to ensure all investments are managed right and that there’s a plan for making things work well enough.
But the potential for the AvidXchange IPO to be highly valuable is significant. AvidXchange has a valuable asset for work that could make it where an IPO will be easy to access and utilize. The IPO will be worth billions of dollars more than what the company was estimated last year. How high the IPO will be worth remains unclear, but it will be an exciting point to explore as the industry moves forward and becomes in high demand.
Frequently Asked Questions
What is AvidXchange and why is its IPO significant?
AvidXchange is a B2B payments firm that provides automated accounts payable and payment solutions to businesses. It's initial public offering (IPO) is significant because it indicates the company's decision to go public and offer shares to investors. An IPO allows AvidXchange to raise capital for growth and expansion while providing an opportunity for investors to participate in the company's success. The potential valuation of up to $7 billion highlights the market's confidence in AvidXchange's business model, technology, and growth prospects in the B2B payments industry.
How does AvidXchange facilitate B2B payments?
AvidXchange streamlines and automates the accounts payable and payment processes for businesses. Its platform replaces manual paper-based workflows with digital automation, allowing businesses to receive, approve, and process invoices more efficiently. AvidXchange provides features such as electronic invoice capture, automated data extraction, workflow automation, electronic approvals, and electronic payments. By digitizing and automating these processes, AvidXchange helps businesses improve accuracy, reduce costs, enhance cash flow management, and gain better visibility and control over their payment operations.
What factors contribute to AvidXchange's potential high valuation?
Several factors contribute to AvidXchange's potential high valuation. Firstly, the company operates in the B2B payments industry, which has been experiencing significant digital transformation and growth as businesses seek more efficient payment solutions. Secondly, AvidXchange's technology platform offers automation and digitization that addresses pain points in accounts payable and payment processes, making it an attractive solution for businesses. Additionally, AvidXchange has a large customer base and strategic partnerships, indicating strong market traction. Finally, the company's growth potential and revenue projections contribute to its high valuation in the IPO.
What impact could AvidXchange's IPO have on the B2B payments industry?
AvidXchange's IPO could have a positive impact on the B2B payments industry. It signifies investor confidence in the sector and validates the importance of digital transformation in payments. The IPO could also attract attention and investment to other innovative B2B payment solution providers, encouraging further advancements and competition in the market. Additionally, AvidXchange's increased access to capital through the IPO can fuel its growth and enable the company to invest in research and development, expand its product offerings, and explore new markets, ultimately driving innovation and improving the overall landscape of B2B payments.
What are the potential risks associated with AvidXchange's IPO?
While AvidXchange's IPO holds promise, there are potential risks to consider. Market volatility and investor sentiment can impact the success and valuation of the IPO. Additionally, increased scrutiny and regulatory compliance requirements that come with being a public company may pose challenges. As AvidXchange seeks to grow and expand, it will face competition from established players and emerging fintech companies in the B2B payments space. Market conditions, changes in customer preferences, and technological advancements can also affect the company's future growth and profitability. It's essential for investors to thoroughly assess these risks before considering an investment in AvidXchange's IPO.
