AvidXchange is set to become Charlotte's next public company. The financial-technology firm filed for an initial public offering today for an unspecified amount.
The filing lists AvidXchange's maximum offering at $100 million, although subsequent entries are left blank. It wants to use proceeds to redeem preferred stock and for "general corporate purposes," including headcount expansion, investments in sales and marketing, product development, administration and working capital, according to the filing with the U.S. Securities and Exchange Commission.
It could also be used for acquisitions or investments into complementary businesses, products or services, the filing stated. The company noted it does not have any definitive acquisition plans at this time.
Shares will be traded on the NASDAQ exchange under the AVDX ticker symbol. In July, executives reorganized the firm by creating a holding company between it and its shareholders. AvidXchange Inc. is now a subsidiary of AvidXchange Holdings Inc.
Charlotte has 18 companies on the Fortune 1,000 list, most recently adding Honeywell International Inc. (NYSE: HON) and Truist Financial Corp. (NYSE: TFC), both in 2019. There are nine Fortune 500 companies based here.
AvidXchange reported more than 30 million shares of preferred stock, totaling $842.03 million, as of June 30. There were more than 54.6 million common shares, totaling about $54,600. Top shareholders include Bain Capital Ventures (13.9%), CEO Mike Praeger (8.4%) and Mastercard Investment Holdings (7.4%), according to the filing.
An AvidXchange spokesperson did not immediately respond to a request for comment. Reports surfaced in March that AvidXchange was eyeing an IPO potentially as early as the second quarter. The company's value was estimated at $5 billion to $10 billion.
"We founded AvidXchange back in April 2000 to tackle a different type of problem that was frustrating many of my fellow entrepreneurs — eliminating the paper invoice and automating the purchasing and AP process for companies," Praeger wrote in a letter included in the filing. "Since then, we’ve been on a mission to transform the way middle market companies pay their bills and free up their AP process from all that paperwork and manual process."
AvidXchange brought in $185.93 million in revenue in 2020, compared to $149.58 million in the prior year. It posted a $101.25 million net loss for 2020. It reported a $92 million net loss for the first half of this year, according to the filing.
Tariq Bokhari, executive director of Carolina Fintech Hub, said this development will be a catalyst for smaller local companies to gain access to capital. It could mean exits or partnerships for those companies. He expects the effects to trickle down through Charlotte's growing fintech ecosystem.
Juan Garzón, executive director at Innovate Charlotte, said the local ecosystem has been waiting for one of its unicorn companies to go public. This brings expertise from high-net-worth founders who have experienced the early entrepreneurship, scaling and IPO processes, he said. Entrepreneurs want to talk with founders who have been through those stages as they seek a similar track.
The only downside is the strenuous reporting and compliance requirements that come with being a public company, Bokhari said.
Charlotte has recently welcomed some big fintech players. Last month, Varo Bank announced it is establishing an East Coast hub here and plans to hire hundreds of people. It will be the first office on this side of the country for Varo, which became the first consumer fintech to land a national bank charter last year after a more than three-year effort. West Coast fintech Robinhood Markets plans to add 389 jobs in Charlotte by 2025 as part of an $11.8 million investment.
"This is ... another amazing chapter in this storyline that Charlotte has had going for it for the last 10 years of fintech dominance and awareness on the global market," Bokhari said.
Underwriters for the IPO are Goldman Sachs & Co., JPMorgan & Co., BofA Securities and Barclays, among others.
AvidXchange has more than 7,000 buyers and paid roughly 700,000 suppliers from 2015 to 2020. It has processed close to 60 million transactions.
