FinTech leader, AvidXchange Inc (AVDX), made it out onto the big leagues yesterday but it didn’t quite go as planned. The Mastercard-backed business payments provider saw its IPO debut on Wednesday, reaching a $4.6b market valuation, but its share price dropped by 3.4% as soon as markets opened.
The firm essentially releases software that automates the payments process for SMEs — everything from invoicing, purchase orders, and supplier payments can be processed through the company’s platform. The company processed about 60 million transactions in the year preceding Q2 2021. Despite the stock drop, AvidXchange still managed to raise $660m as it upsized its IPO by taking on the upper range of its opening share price. With the company’s revenues increasing annually by 34% in H1 2021 and a client base of 7k+, the drop could just be listing jitters as the share recovered close to its IPO price in after-market trading.
why it matters
AvidXchange plans to use the listing capital to develop its sales and marketing base while expanding the team. The company has also taken on five subsidiaries since 2014, hinting that some of the capital could also go towards strategic acquisitions.