AvidXchange saw its share price fall more than 4% on its first day of trading after the automated payment firm priced an upsized initial public offering (IPO) at the high end of its targeted range.
Shares are trading on the Nasdaq Global Select Market under the symbol “AVDX”. After its opening drop, AvidXchange's share price took a roller coast ride and closed down only $0.06, or 0.24%, at $24.94.
Charlotte, North Carolina-based AvidXchange announced Tuesday that it had raised $660m in gross proceeds by selling 26.4 million shares at $25.
The firm had initially anticipated a price range of $21-$23 per share before boosting it to $23-$25. AvidXChange originally outlined plans to sell 22 million shares in its IPO registration statement.
Company serves middle-market businesses
Founded in 2000, AvidXchange touts itself as a leading provider of accounts payable (AP) automation software and payment services for middle-market companies, which the company defines as firms generating revenue between $5m and $1bn and their suppliers.
The company says its software-as-a-service platform has provided automated and digitised payment workflows for 7,000 businesses and 700,000 suppliers.
AvidXchange considers middle-market businesses to be underserved because their AP needs fall between those required by small and midsize businesses and large enterprises.
More hires intended
AvidXchange plans to use proceeds from the IPO to redeem preferred stock and for general corporate purposes, including more hires and working capital. The firm said it may also use some of the money to acquire complementary businesses. But no acquisitions were planned.
The IPO’s gross proceeds excluded the underwriters’s option to purchase an additional 3.96 million shares at the IPO price.
Goldman Sachs and JP Morgan were the lead bookrunners for the offering. BofA, Barclays, Credit Suisse, KeyBanc, Deutsche Bank and Piper Sandler also played bookrunning roles. Wolfe Nomura and Fifth Third Securities served as co-managers.
For the first six months of 2021, AvidXchange reported revenue of $114m (£83.8m), up 33.3% from $85.5m a year earlier. Adjusted EBITDA was negative $12.1m compared to negative $19.6m.
But the firm’s net loss increased 82% to $92m from $50.6m in the first half of 2020. AvidXchange has generated a loss of $484m since its inception.