April 23, 2020 / 4:10 PM / a month ago

Payments fintech AvidXchange raises $128 million to add to funding

NEW YORK (Reuters) - Business payments processing firm AvidXchange Inc, whose investors include Mastercard Inc (MA.N) and PayPal Holdings Inc (PYPL.O) co-founder Peter Thiel, said on Thursday it had added an additional $128 million to a $260 million fundraising round it closed in January.

AvidXchange provides software that automates payments, invoicing and accounting for small and mid-sized businesses. Many of them have been hurt by the coronavirus outbreak, which has shut down large swaths of the economy.

However, the boost in e-commerce and a drive to make more business operations digital is positive for the Charlotte, North Carolina-based company, its chief executive and co-founder, Michael Praeger, said in an interview.

“The value proposition that we’ve been evangelizing for years, an event like COVID-19 is becoming the catalyst to change an industry,” Praeger told Reuters.

“We had a record first quarter as companies recognized that, in the work-from-home environment, we can’t get our bills paid if our accounts payables team is at home, because the only way to cut a paper check is being in the office.”

Among the half-dozen investors involved in the funding were Sixth Street Partners - which led the January fundraising - as well as Mastercard, Lone Pine Capital and Schonfeld Strategic Advisors.

Praeger declined to comment on AvidXchange’s valuation. A source familiar with the matter said AvidXchange was worth around $2 billion following the fundraising.

AvidXchange will use the money to make investments in its existing business, which could include “opportunistic acquisitions”, Praeger said, although he cautioned that the current market volatility meant this was unlikely in the coming months.

The company also plans to go public in the future. Praeger, however, said the company was not planning a listing in 2020, even before the virus hit.

Peer Bill.com Holdings (BILL.N), which automates payments systems for small businesses, made its debut in the stock market in December. The company currently trades at more-than-double its offer price, despite the market dislocation which has pulled the stock price back from its mid-February high.

Fintech-focused investment bank FT Partners advised AvidXchange on the fundraising process.

(This story has been corrected to drop ‘TPG’ from Sixth Street Partners’ name in paragraph 6)

Reporting by David French in New York; editing by Jonathan Oatis

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