AvidXchange is planning to go public. Here’s what we know so far.
AvidXchange, the Charlotte-based payment software company, plans to go public, according to recent filings with the Securities and Exchange Commission.
For years, the firm has been one of Charlotte’s unicorns, a term for a privately held company with a valuation of at least $1 billion. An IPO would change that status.
Here are the key details from Friday’s SEC filing:
- AvidXchange plans to raise up to $100 million in the offering. The money will be used on new hires, sales and marketing efforts, product development, general and administrative matters and working capital, the filing said. The company might also use some of the proceeds for acquisitions or other investments, though it said it has no definitive plans to do so.
- The stock would be listed on the Nasdaq exchange under the ticker symbol “AVDX.”
- The leading underwriters for the offering are Goldman Sachs, BofA Securities, J.P. Morgan and Barclays.
- Major shareholders include CEO Michael Praeger, Bain Capital Ventures and Mastercard Investment Holdings, Inc.
The company’s SEC filings also offer one of the first inside looks at its finances. AvidXChange reported a net loss of approximately $101 million for 2020 and revenue of about $186 million. In 2019, the firm reported a net loss of $93.5 million and about $150 million in revenue.
It’s not uncommon for growing tech companies — including big players like Uber and Snapchat parent Snap Inc. — to post net losses when plugging money from investors back into growth efforts. AvidXChange has experienced net losses and negative cash flows from operations since its inception in 2000, the company disclosed in the risk factors section of the filing.
Also in its list of risk factors, AvidXChange disclosed that the company has identified “material weaknesses” in its internal financial reporting. That resulted in a restatement of the firm’s 2019 consolidated financial statements, as well as now-corrected errors for the periods ended Dec. 31, 2020 and June 30, 2021.
“We lack a sufficient complement of personnel with an appropriate level of accounting knowledge, training, and experience to appropriately analyze, record and disclose accounting matters timely and accurately,” AvidXChange said in the filing. The company is building out its accounting capabilities, it said, and the issues should be “fully remediated” in 2022.
A unicorn no more
AvidXChange’s rapid growth has been fueled by a number of mergers and acquisitions in recent years, as well as by private funding.
In 2017, for instance, AvidXchange acquired a Massachusetts firm called Ariett, a private company that specializes in technology that lets businesses automate processes and manage employee expenses. That summer, it also announced a $300 million funding round that included PayPal founder Peter Thiel among its investors.
The next year, the firm 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 that it would spend $41 million to double the size of its Charlotte headquarters. AvidXchange reached a $2 billion valuation in 2020.
Praeger has been mulling a public offering of AvidXchange since at least last year.
“We definitely think that for us to achieve our long-term potential we’ll look to be a public company at some point,” he told the Observer in January 2020. “...It’ll be something that we continue to evaluate over the next couple years.”
