Mastercard-Backed AvidXchange Slips in Debut After Upsized IPO
(Bloomberg) -- Financial technology company AvidXchange Holdings Inc. ended its trading debut below the price in an initial public offering it had expanded to raise $660 million.
Shares of the company, whose backers include a Mastercard Inc. affiliate and venture capitalist Peter Thiel, fell as much as 6.6% Wednesday and closed down 0.2% to $24.94 in New York, giving AvidXchange a market value of about $4.9 billion. Accounting for employee stock options and restricted stock units, the Charlotte, North Carolina-based company has a fully diluted value closer to $5.1 billion.
AvidXchange sold 26.4 million shares Tuesday for $25 each after marketing 22 million for $23 to $25.
The company’s software, designed for small and midsize businesses, provides a platform for accounts payable and related functions. It currently operates in eight industry verticals from real estate to media and is looking to grow by adding more, Chief Executive Officer Michael Praeger said in an interview.
“There’s a massive white-space opportunity within the middle market,” Praeger said.
AvidXchange has completed five acquisitions since 2014, according to data compiled by Bloomberg. Praeger said he expects to pursue more deals.
‘No. 1 Competitor’
The biggest obstacle to growth, he said, is converting potential customers from their legacy systems.
“Our No. 1 competitor, which we wish we could take out, is the status quo of the paper-base process,” Praeger said.
AvidXchange’s largest backer is Bain Capital Ventures, which controls more than 12% of the shares, according to the company’s filings with the U.S. Securities and Exchange Commission. Praeger, with almost 7.4% of the stock, has the second-biggest ownership stake.
Mastercard Venture Holdings Inc., the venture arm of the credit card company, controls 6.5% of the stock. Thiel invested in the company in 2017 according to data provider PitchBook but isn’t listed in its SEC filings among shareholders with a 5% stake or greater. The company was valued at about $2 billion in a funding round in January 2020.
AvidXchange’s revenue and losses have climbed from last year. It had a net loss of $92 million on revenue of $114 million for the six months ended June 30, compared with a loss of $51 million on revenue of $85 million a year earlier, according to the filing
The offering was led by Goldman Sachs Group Inc. and JPMorgan Chase & Co. The shares are trading on the the Nasdaq Global Select Market under the symbol AVDX.
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