Charlotte Payments Company AvidXchange Files IPO Request
AvidXchange, the Charlotte-based payment software company, plans to go public, according to recent filings with the Securities and Exchange Commission.
For years, the company has been one of Charlotte’s unicorns, a term for a private company valued at at least $ 1 billion. An IPO would change this status.
Here are the key details of Friday’s SEC filing:
- AvidXchange plans to raise up to $ 100 million in the offer. The money will be used for new hires, sales and marketing efforts, product development, general and administrative matters and working capital, according to the filing. The company could also use part of the proceeds for acquisitions or other investments, although it has said it has no final intention to do so.
- The stock would be listed on the Nasdaq Stock Exchange under the ticker symbol “AVDX”.
- The main subscribers of the offer are Goldman Sachs, BofA Securities, JP Morgan and Barclays.
- Major shareholders are CEO Michael Praeger, Bain Capital Ventures and Mastercard Investment Holdings, Inc.
The company’s documents with the SEC also offer one of the first glimpses of its finances. AvidXChange reported a net loss of around $ 101 million for 2020 and revenue of around $ 186 million. In 2019, the company reported a net loss of $ 93.5 million and revenue of approximately $ 150 million.
It’s not uncommon for growing tech companies, including big players like Uber and Snapchat, parent company Snap Inc., to experience net losses when they reinvest investor money in growth efforts. AvidXChange has experienced net losses and negative cash flow from its business since its inception in 2000, the company said in the risk factors section of the file.
Also in its list of risk factors, AvidXChange revealed that the company had identified “material weaknesses” in its internal financial reports. This resulted in a restatement of the company’s 2019 consolidated financial statements, as well as errors now corrected for the periods ended December 31, 2020 and June 30, 2021.
“We lack sufficient staff with the appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters in a timely and accurate manner,” AvidXChange said in the filing. The company is strengthening its accounting capabilities, he said, and the issues are expected to be “fully resolved” in 2022.
A unicorn either
The rapid growth of AvidXChange has been fueled by a number of mergers and acquisitions in recent years, as well as private financings.
In 2017, for example, AvidXchange acquired a Massachusetts company called Ariett, a private company specializing in technologies that allow businesses to automate processes and manage employee expenses. That summer, he also announced a $ 300 million funding round that included PayPal founder Peter Thiel among his investors.
The following year, the company received more than $ 20 million in state and local incentives for its plan to expand and hire more than 1,200 people in Charlotte.
And in 2019, the company announced it would spend $ 41 million to double the size of its head office in Charlotte. AvidXchange reached a valuation of $ 2 billion in 2020.
Praeger has been considering a public offering of AvidXchange for at least last year.
“We really believe that in order to reach our long-term potential, we will be looking to become an open company at some point,” he told the Observer in January 2020. “… It will be something that we do. will continue to evaluate over the next two years.