Charlotte-Based Fintech Unicorn AvidXchange Raises $128M More For Accounts Payable Platform

Fintech unicorn AvidXchange, a provider of accounts payable (AP) and payment automation solutions for the middle market, has raised an additional $128 million in funding.

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The financing is an extension of a $260 million Series F round raised in January, which we covered in this piece. The company is describing it as “an up round” but was not more specific.

According to the Charlotte, North Carolina-based company, the money was raised from Lone Pine Capital, Schonfeld Strategic Advisors, Pivot Investment Partners, MasterCard, Sixth Street Partners and Neuberger Berman on behalf of clients. The latest round brings the company’s total venture and private equity raised since its inception in 2000 to more than $928 million.

AvidExchange says it will use the new capital toward strategic growth initiatives and “continued innovation.”

The company, already valued at over $1 billion, did not disclose at which valuation this round was raised. However, Reuters reported in December that AvidXchange’s next round could value the company at around $2 billion.

Only 40 percent of U.S. businesses automate their accounts payable processes, noted Michael Praeger, AvidXchange CEO and co-founder, in a written statement.

“We continue to solve a real problem for companies that still rely on paper invoices and checks, fundamentally changing the way they pay their bills,” he added. “This has become even more evident as we see businesses implementing continuity plans and shifting to work from home models, making automation essential to support mission critical processes and keep operations running.”

Praeger told Crunchbase News via email that the company’s January round was oversubscribed so it “made the decision to raise an additional $100 million because of the high level of investor interest. That original target ultimately grew to $128 million based on demand.”

Growth

AvidXchange’s single software-as-a-service-based platform is aimed at giving businesses a way “to gain efficiency and visibility into payments by eliminating the paper invoice and paper check.” The company says it processes over $140 billion transactions annually across its network of more than 600,000 suppliers. It has 6,000 customers.

The year of 2019 was busy for AvidXchange. Last July, the company acquired BankTEL Systems, adding nearly 2,000 bank customers. And in October, the company launched new lines–AvidPay and AvidInvoice–to serve the long-term health care and social services sectors. Also during the year it hired 175 people, raising its headcount to more than 1,500 across seven offices. The company said in January that it is planning “a headquarters expansion that will double its footprint and accommodate an additional 1,200 teammates.”

Dinkar Jetley, co-founder and partner of Pivot Investment Partners, pointed out that his firm first invested in AvidXchange in 2016 and is “doubling down” on its partnership “as the adoption of automation technology continues to accelerate.”

North Carolina’s rise

AvidXchange is one of only a few unicorns based in the southeastern state. However, North Carolina in general has been home to a number of large funding rounds over the past year. In October, I covered the news that Raleigh, North Carolina-based cloud tech startup Pendo had raised $100 million in a Series E round that propelled the company to unicorn status. The Series E, led by Sapphire Ventures, was raised just over 13 months after Pendo’s $50 million Series D. Also in October, North Carolina-based nCino, which has developed a cloud-based operating system for financial institutions, raised $80 million in a round of funding led by T. Rowe Price Associates Inc.

In October 2018, I took an in-depth look at North Carolina’s growing startup scene. Overall in 2018, according to Crunchbase data, venture funding in N.C. startups surged by more than 150 percent to $2.48 billion compared to $1.06 billion in 2017. Those numbers dipped pretty dramatically–to $895.2 million in 2019. (This figure of course could, and likely will, increase later as more rounds are reported.)

Illustration: Li-Anne Dias