Management says it will use the net proceeds from the IPO as follows: A figure under 10% is generally considered a ‘low float’ stock which can be subject to significant price volatility. IPO DetailsĪvidXchange intends to raise $484 million in gross proceeds from an IPO of its common stock, offering 22 million shares at a proposed midpoint price of $22.00 per share.Įxisting investor Capital Group and potential new investors BlackRock and Neuberger Berman have indicated a non-binding interest to purchase shares of up to a total of $140 million in the aggregate at the IPO price.Īssuming a successful IPO, the company’s enterprise value at IPO would approximate $3.8 billion, excluding the effects of underwriter over-allotment options.Įxcluding effects of underwriter options and private placement shares or restricted stock, if any, the float to outstanding shares ratio will be approximately 11.5%. Lowered operating losses and negative operating marginįluctuating and high cash used in operationsīelow are relevant financial results derived from the firm’s registration statement:Īs of June 30, 2021, AvidXchange had $203 million in cash and $940 million in total liabilities.įree cash flow during the twelve months ended June 30, 2021, was negative ($59 million). Major competitive or other industry participants include:ĪvidXchange’s recent financial results can be summarized as follows: The main drivers for this expected growth are a growth in middle-market and small organizations in adopting accounts payable software and a continuing trend toward cloud-based systems.Īlso, users have continuing concerns about security related to data authentication, which may act as a brake on the growth of demand in the market. This represents a forecast CAGR (Compound Annual Growth Rate) of 9.1% from 2021 to 2028. Market & CompetitionĪccording to a 2021 market research report by Verified Market Research, the global market for accounts payable software was an estimated $8.77 billion in 2020 and is forecast to reach $17.6 billion by 2028. The firm’s net transactions retention rate from 2019 to 2020 was 102%. The Rule of 40 is a software industry rule of thumb that says that as long as the combined revenue growth rate and EBITDA percentage rate equal or exceed 40%, the firm is on an acceptable growth/EBITDA trajectory.ĪVDX’s most recent calculation was only 5% as of June 30, 2021, so the firm needs significant improvement in this regard, per the table below: The Sales and Marketing efficiency rate, defined as how many dollars of additional new revenue are generated by each dollar of Sales and Marketing spend, has risen to 1.0x in the most recent reporting period, as shown in the table below: Sales and Marketing expenses as a percentage of total revenue have dropped as revenues have increased, as the figures below indicate: The company also sells through third-party software providers like RealPage, MRI Software, and SAP Concur. The firm seeks customers in the middle market space via a direct sales and marketing approach as well as indirectly through independent resellers and strategic partnerships such as through MasterCard's B2B Hub. Management is headed by co-founder, Chairman and CEO Michael Praeger, who has been with the firm since inception and was previously co-founder of PlanetResume and InfoLink Partners.īelow is a brief overview video of AvidXchange:ĪvidXchange has received at least $842 million in equity investment from investors including Bain Capital Ventures, Mastercard, Caisse de depot et placement du Quebec, Ossa Investments, Capital Research, and Management advised entities, and Steve McLaughlin entities. Company & TechnologyĬharlotte, North Carolina-based AvidXchange was founded to develop a cloud-based AP accounting and payments system aimed at middle-market companies and their suppliers. The firm provides a SaaS-based accounts payable software system.ĪVDX needs improvement in certain metrics, its operating losses remain significant, and is using significant amounts of cash so may need to come back to equity or debt markets in the not-too-distant future. Designer491/iStock via Getty Images Quick TakeĪvidXchange Holdings ( NASDAQ: AVDX) has filed to raise $484 million in an IPO of its common stock, according to an S-1/A registration statement.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |