Another day, another big raise by a SaaS company. This time in a state that is increasing its profile as a startup hub as of late.
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TPG Sixth Street Partners and other unnamed investors participated in the financing, which brings the company’s total venture and private equity raised since its inception in 2000 to more than $800 million. Previous backers include MasterCard, Bain Capital Ventures and Founders Fund. The company is already valued at over $1 billion but it would 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.
More than 60 percent of U.S. businesses still pay bills with paper checks, leading to enormous administrative costs annually, noted Michael Praeger, AvidXchange CEO and co-founder, in a written statement.
“We’re shaping the future of the B2B payments industry by fundamentally changing the way businesses pay their bills, providing a single platform for AP and payments with the largest payments network for the middle market,” he added.
The year of 2019 was a busy one 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 healthcare and social services sectors. Also during the year it hired 175 people, raising its headcount to more than 1,400 across seven offices. In a statement, the company said it is currently planning “a headquarters expansion that will double its footprint and accommodate an additional 1,200 teammates.”
As of August 2019, AvidXchange had more than 5,500 clients in North America, according to the Charlotte Business Journal. I reached out to ask about ARR percentage growth but the company declined to provide numbers.
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