AvidXchange secures $300 million funding supported by Mastercard and CDPQ
09 June 2017 | 4877 views | 0
AvidXchange, a leading fintech provider of accounts payable and payment automation for midsize companies, announced today its strategic partnership with Mastercard to deliver accounts payable and payment automation to small and midsize businesses.
AvidXchange™ Signs $300 Million in Financing to Support Business Growth with New Initiatives, Including The Mastercard B2B Hub that Will Deliver AP and Payment Automation through Banks
CHARLOTTE, N.C., (June 8, 2017) - To support AvidXchange’s continued growth and ability to scale operations for strategic ventures, such as the one with Mastercard, the company is also announcing the signing of $300 million in financing with contributions from Caisse de dépôt et placement du Québec (CDPQ), Mastercard, Temasek, and Peter Thiel. The company’s long-term partner, Financial Technology Partners LP and FTP Securities LLC (“FT Partners”), served as exclusive financial and strategic advisor to AvidXchange in this transaction.
“We founded AvidXchange to revolutionize the way midsize companies pay their bills. The strategic partnership with Mastercard will help us to realize the vision that we’ve had to transform an industry, and to reach the 350,000 businesses that are currently operating in the middle market with antiquated processes,” commented Michael Praeger, CEO and Co-Founder of AvidXchange. “The round of funding that we closed will empower us to continue to make bold business decisions to serve the midsize businesses, and scale our operations as we maintain focus on delivering a superior customer experience. We are thrilled with the group of investors that we assembled. The diversity in this cohort of investors is a sign of the growing interest in the fintech sector and acknowledgement that companies, like AvidXchange, are the way forward for business,” added Praeger.
AvidXchange has been a leader in payables automation for businesses since 2000, and serves more than 5,500 customers in North America. Mastercard and AvidXchange forged this partnership to leverage AvidXchange’s expertise in AP and payment automation and Mastercard’s proven commercial payment solutions to further penetrate the middle market, which has been much slower to adopt technologies to automate manual invoice and payment processes than larger enterprises. The Mastercard B2B Hub with AvidXchange will be delivered through card issuers as an end-to-end automated solution that meets all the payment needs of small and midsized companies. AvidXchange will serve as the execution partner for Mastercard’s launch of The Mastercard B2B Hub in the United States. Beginning later this year, The Mastercard B2B Hub will be made available to companies through their bank or commercial card issuer. AvidXchange will offer banks who choose not to utilize their own card payment capabilities with The Mastercard B2B Hub program options through its existing relationships with Comdata and KeyBank.
“Midmarket and small businesses are growth engines of our economy. The Mastercard B2B Hub is the latest way we are working to meet the broader payment needs of this segment,” said Colleen Taylor, executive vice president of new payments business for Mastercard. “We see this solution as helping organizations maximize every minute and every dollar that they invest in their business. The comprehensive automated payment experience we deliver will help improve supplier relationships and accelerate the conversion of B2B payments from paper checks to electronic payments.”
The group that AvidXchange assembled for its $300 million round highlights the growing diversity in investment interest for fintech. CDPQ is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. It is one of North America’s leading institutional fund managers, and this transaction adds to CDPQ’s private equity investments in the financial technology sector. Mastercard is a leader in electronic payments, and this investment will support the partnership with AvidXchange. Temasek is an investment company headquartered in Singapore, whose investment activities are guided by its investment themes and the long-term trends they represent.