What fintech sector anxiety? AvidXchange’s latest fundraiser reaches whopping $388M

CHARLOTTE – Following up on information first disclosed in an SEC filing, fast-growing fintech AvidXchange says the latest cash was in fact part of an oversusbscribed round now reaching a whopping $388 million.

The privately held firm which provides a variety of financial services disclosed the initial $260 million in January but did not specify the sources or note that the funding disclosed earlier this week was in fact part of that round.

At $388 million it’s one of the largest private equity funding rounds ever in North Carolina, the largest being some $1 billion going to Cary-based Epic Games in late 2018. The company already was valued at more than $2 billion based on its capital fundraising, according to Reuters. It has raised more than $900 million since launching in 2000, according to private equity data base Crunchbase.

Lone Pine Capital, Schonfeld Strategic Advisors, Pivot Investment Partners, Mastercard, Sixth Street Partners and Neuberger Berman (“on behalf of clients”) were among the investors, AvidXchange disclosed Thursday. Lone Pine Capital, Neuberger Berman and Schonfeld Strategic Advisors are new investors.

AvidXchange

The funding comes despite the COVID-19 pandemic and warnings from such firms at PitchBook that the fintech sector faces challenges.

“The current economic freeze has induced significant distress across vast swathes of economies, markets and industries,” private equity and venture capital news site PitchBook reported Thursday.

“Small and medium-sized businesses (SMBs) have been disproportionately affected despite frantic policy efforts from governments worldwide. As that segment of the market experiences significant disruptions, the fintechs that targeted SMBs in turn are now experiencing ripple effects.”

CEO sees big opportunities

Michael Praeger, Co-Founder and Chief Executive Officer of AvidXchange, sees ample opportunities for growth.

“With only 40 percent of U.S. businesses automating their accounts payable processes, we continue to solve a real problem for companies that still rely on paper invoices and checks, fundamentally changing the way they pay their bills” Praever said in the funding announcement.

Mike Praeger, AvidXchange CEO

“This has become even more evident as we see businesses implementing continuity plans and shifting to work from home models, making automation essential to support mission critical processes and keep operations running.”

The company says the new casy will support “strategic growth initiatives and continued innovation.”

AvidXchange already is committed to building a new headquarters in Charlotte and hiring additional personnel.

What the new investors are saying

In the announcement, AvidXchange included statements from its new backers:

“We recognized the impact that AvidXchange could have on the B2B payments market prior to our initial investment in 2016 and are doubling down on our partnership as the adoption of automation technology continues to accelerate,” said Dinkar Jetley, Co-Founder and Partner, Pivot Investment Partners.
“AP automation is one of the most exciting spaces within B2B payments given the potential cost savings and increased efficiency for buyers and suppliers,” said Charles Kantor, Senior Portfolio Manager, Neuberger Berman. “We see AvidXchange as perhaps the strongest emerging platform in this space and are excited to partner with the team on their journey to further drive long term value creation.”
“AvidXchange has experienced tremendous growth due to the strength of its supplier network and continued expansion into new verticals,” said David Craver, Portfolio Manager and Managing Director, Lone Pine Capital. “We look forward to our partnership, as both buyer and supplier customers see the value AvidXchange brings to their businesses in leveraging the preeminent payment network for the middle market.”