A recent noteworthy investment has primed a local fintech company for growth in the Birmingham market.
Prepaid Technologies recently secured a $96 million investment guided by New Jersey-based growth equity firm Edison Partners.
The digital payment provider, which has seen significant growth with revenue increasing nine times over the past five years, said it plans to use the investment to grow its product and headcount and potentially make new acquisitions.
“We've been seeing really great success over the last couple of years, and I just knew in my gut, as did others on our board, that we could really elevate this company to the next level and just be a major player in the fintech space,” said Prepaid Technologies CEO Stephen Faust.
Faust has a list of priorities for the funding.
It includes continuing to enhance its technology with new features, connectivity and automation as well as adding new products and growing its brand through marketing.
He said while acquisitions are also on the table, they are not the top priority. The company plans to immediately hire 20 team members, he said, with more as the company continues to grow.
“We've done two or three smaller portfolio and company acquisitions that have helped us grow. Because we have multiple lines of business, there could be targets in several of those lines of business that we could acquire to grow faster,” he said. “We'll continue to be hiring at a heavy pace. We have senior executive positions as well as entry-level positions across the entire organization coming up, and we've got those prioritized.”
And he said the company will primarily focus on acquiring talent in the local market.
In addition to creating jobs, Faust said this transaction could spur additional investments in Southeastern fintech companies through Edison. This deal was Edison’s first in Alabama.
“They love the idea of us spreading the word about them so that they can find other companies to invest in in the region and really enhance what's going on here from a fintech community,” he said. “It has been unbelievable the feedback I've gotten from the community here of other founders in the investment community (and) the tech community that says this is such a win for Birmingham. People are looking at us now, and hopefully this can be … the continuation of Birmingham really being recognized as a tech hub in the Southeast.”
Chris Sugden, managing partner of Edison Partners, said the firm focuses on underserved markets outside of Silicon Valley and has seen burgeoning deals across fintech, health care and enterprise technology solutions in the Southeast.
“There's a big opportunity to invest in and help grow young and driven companies, if you look where others don't,” Sugden said. “As a matter of strategy, we refuse to get sucked into the hype – and I would argue often overpriced – markets.”
