Posted on Friday, Sep 22nd 2017
According to a Business Insider report, the automation of B2B payments and accounts payable is continuing to grow. Many businesses still make more than half of their B2B payments by check and are now looking to increase their spending on electronic and card-based solutions. Billion Dollar Unicorn AvidXchange is helping businesses unlock this automation opportunity.
Charlotte-based AvidXchange was founded in 2000 by Chris Tinsley, David Miller, and Michael Praeger. It provides accounts payable and on-demand invoice management solutions to its customers. It helps simplify the way companies pay their bills by automating invoice and payment processes for mid-market companies.
AvidXchange’s portfolio of services spans the entire process of raising purchase order to payment processing. Using its suite of services, businesses can automate their purchase order process, follow an approval workflow for purchase order raising and payment, control costs by preventing unwanted purchases, and use an automated scanned invoice system that codes and routes invoices to the appropriate workflow.
AvidXchange’s products have attracted more than 5,500 customers in North America. Recently, the company tied up with Mastercard to leverage AvidXchange’s expertise in AP and payment automation and Mastercard’s commercial payment solutions to further penetrate the middle market. As part of the tie-up, the two companies will offer Mastercard B2B Hub with AvidXchange through card issuers as an end-to-end automated solution that will be able to cater to all payment needs of small and midsized companies. AvidXchange will be the execution partner for Mastercard’s launch of The Mastercard B2B Hub in the United States. Later this year, Mastercard B2B Hub will be made available to companies through their bank or commercial card issuer.
Besides tie-ups, AvidXchange has also made several acquisitions in the recent past. It acquired Houston-based Strongroom Solutions that provides accounts payable software for financial institutions and companies that manage invoices and payments for homeowner associations nationwide in 2015. In July 2016, it had also acquired Piracle, a Salt Lake City-based organization that specializes in payment management tools. Terms of the acquisitions were not disclosed.
AvidXchange is privately held and does not disclose its financials. Analysts peg its 2016 revenues at $65 million with a growth rate of nearly 265% over the last three years. It has been venture funded so far with $545 million in funding from investors including Bain Capital Ventures, Caisse de Depot et Placement du Quebec, Charlotte Angel Partners, CT Communications, Fifth Third Capital, Foundry Group, Keybank, MasterCard, Peter Thiel, Pivot Investment Partners, Ron Suber, Square 1 Bank, and Temasek Holdings. Its latest round of funding was held earlier this June when it raised $300 million at $1.4 billion valuation. The investors in the round included Mastercard, Peter Thiel, and Caisse de Depot et Placement du Quebec. The company plans to use the funds to expand in the medium-sized business segment.
AvidXchange also appears to be evaluating the idea of going public. It recently named a former eBay and Wachovia executive Steve Boehm as its new chief operating officer. AvidXchange plans on leveraging Boem’s global and public company experience to drive growth.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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