AvidXchange raises $128 million to meet coronavirus-driven demand surge

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Digital business payments are taking off during the coronavirus crisis, sending accounts payable automation firm AvidXchange to the fundraising well for the second time in 2020.

Existing investors Mastercard, TPG Sixth Street Partners and Pivot Investment Partners were part of the $128 million investment in AvidXchange, which is currently valued at $1 billion. The round also included three new investors, Lone Pine Capital, Neuberger Berman and Schonfeld Strategic Advisors.

In January TPG Sixth Street Partners invested $260 million for equity in phase one of the Series F to help AvidXchange expand into the middle market. The most recent funds will be used to drive further adoption and innovation of its SaaS-based AP automation platform which offers multiple e-payment options through its AvidPay Network of more than 600,000 suppliers.

“With only 40% of U.S. businesses automating their accounts payable processes, 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. 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,” Michael Praeger, co-founder and CEO at AvidXchange, said in a press release.

Heather Caudill, a senior vice president at AvidXchange, recently noted the coronavirus is putting pressure on companies that are now struggling with their in-house payment solutions as office staff are now remote and implementation timelines for new projects are getting shorter. For example, implementations for new projects that normally took 30 days are now being squeezed into 14 day timelines. Sixth Street Partners has been aggressively investing in fintech firms during 2020 as the world economies are being forced into a recession due to the coronavirus, possibly leading to more favorable fintech investment valuations. In addition to the $260 million January investment in AvidXchange, Sixth Street also shared a $1 billion investment in Airbnb earlier this month with fellow VC firm Silver Lake Partners.

Lone Pine Capital’s investment in AvidXchange comes fresh off the heels of its hasty exit of Chinese coffee chain Luckin Coffee that had only recently gone public. Lone Pine sold its entire holdings in Luckin – over 6 million shares – after the chain reported fabricated accounting. At Luckin’s peak valuation in January the Lone Pine stake was valued at over $300 million.

According to Crunchbase, a website that tracks investments in private companies, AvidXchange has raised over $930 million in debt and equity financing in seven fundraising rounds since its founding in 2000.

Charlotte, N.C.-based AvidXchange processes over $140 billion annually in transactions for its 6,000 North American clients as they seek to pay bills to the 600,000 suppliers in the AvidPay Network. In July 2019 AvidXchange acquired BankTel Systems, which added nearly 2,000 bank customers to its financial services vertical.

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Coronavirus Investments B-to-B payments Mastercard