More details have emerged about AvidXchange Holdings Inc.'s initial public offering filed last week.
The $581.9 million offering involves 22 million shares of common stock at $21 to $23 each, according to today's securities filing. Underwriters have the option to purchase another 3.3 million shares within 30 days, the filing stated.
Last week's filing listed an IPO up to $100 million, although it left subsequent entries blank. That $100 million figure is sometimes used as a placeholder until the actual amount is filed. AvidXchange wants to use the proceeds to redeem preferred stock, an estimated $169 million, and for "general corporate purposes," including headcount expansion, investments in sales and marketing, product development, administration, working capital, acquisitions or investments into complementary businesses, according to Friday's filing.
AvidXchange, an automated payments provider for middle-market companies, estimates net proceeds will be about $444.6 million, or $512.1 million if the underwriters exercise their option, after underwriting discounts, commissions and fees paid by the company. That's assuming a share price of $22.
Underwriters include Goldman Sachs & Co., JPMorgan & Co., BofA Securities and Barclays, among others.
Shares will be traded on the Nasdaq under the AVDX ticker symbol. Estimated market capitalization post-offering is $4.21 billion, again assuming $22 per share. The 22 million shares equate to more than 11% ownership in the company. Bain Capital Ventures, CEO Mike Praeger and Mastercard Investment Holdings have been the top shareholders — holding a collective 29% ownership pre-offering, versus 26% post-offering, according to today's filing.
An AvidXchange spokesperson declined a request for comment.
AvidXchange is one of four Charlotte-area unicorns, a term describing a private company valued at $1 billion or more. Reports surfaced this spring about a likely IPO coming as early as the second quarter. The IPO is a big step forward for the local financial-technology industry and is expected to positively impact access to capital and other growing companies. Charlotte's fintech industry has grown in size and recognition over the last few years.
"It's really important for Charlotte to see a company go from birth to IPO," said Dan Roselli, founder of RevTech Labs, formerly QC Fintech. "I think that this IPO is a testament to what the marketplace sees in the potential of AvidXchange."
Roselli noted how local high-growth companies have opportunities here, including an IPO like AvidXchange, a strategic exit like LendingTree Inc. (NASDAQ: TREE) or an ongoing private model like Red Ventures. Exits have been more popular over the past 15 years, he said, although IPOs are starting to come back.
Going public will likely come with more pressure for profitability, Roselli said. AvidXchange publicly shared its financial performance for the first time as part of the IPO filing, posting a $101.25 million net loss for 2020 and a $93.55 million net loss in 2019. Losses are not unusual for fast-growing private companies, he said. Goals are focused more on driving growth than turning a profit.
Upon closing, AvidXchange plans to add three directors to its board — Teresa Mackintosh, CEO of computer software company Trintech; Lance Drummond, formerly with TD Canada Trust; and J. Michael McGuire, former CEO of accounting firm Grant Thornton. Praeger serves as board chairman, with Matthew Harris of Bain Capital serving as lead independent director, according to today's filing.
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 since its founding in 2000.
