As more people and businesses move transactions online during the pandemic, financial technology companies are reaping the benefits. On top of other expected IPOs in 2021 like Robinhood, Affirm and Marqeta, two more fintech unicorns are planning to go public, according to people familiar with the matter. AvidXchange, a Charlotte company that lets businesses pay their bills online, and Flywire, a Boston startup that helps organizations receive digital payments in foreign currencies, are planning their exits.
AvidXchange, cofounded in 2000 by serial entrepreneur Michael Praeger, caters to medium-sized businesses like real estate brokerage Douglas Elliman and helps them save time by moving invoices online. “Last year was our seventh consecutive year of growing on average 40%,” Praeger told Forbes in May. As of the summer, its annualized revenue was roughly $200 million, and it had more than 6,000 customers.
One of AvidXchange’s competitors is Bill.com, the public Palo Alto company that lets small businesses pay their bills online. Bill’s stock has shot upward 150% this year—investors today value it at $7.6 billion. Josh Beck, an equity research analyst at KeyBanc Capital Markets, projects Bill will bring in $215 million in revenue over the next year, which means investors believe it’s worth 35 times its forward-looking revenue. If AvidXchange went public with strong profit margins and drew the same warm reception, it could be valued similarly to Bill.com. Avid has raised $1.2 billion in funding to date and was last valued at $1.65 billion, according to PitchBook. (AvidXchange declined to comment for this article.)
Flywire was founded in 2009 by Spanish entrepreneur Iker Marcaide, and former sales executive Mike Massaro took over as CEO in 2013. Its software lets universities, hospitals and businesses take payments in 150 currencies. Clients include Cornell University, Hilton and Segway. Flywire processes more than $10 billion in payments annually and will exceed $100 million in revenue this year, Massaro says. The company has been growing between 40% and 60% a year for the last few years.
He says he “can’t confirm any plans” to go public, but he adds, “You build these companies ultimately where they end up in the hands of a strategic acquirer, or you have an opportunity to go public … Those two trajectories are top of mind for us.”
Massaro won’t say whether Flywire plans to pursue a traditional IPO or a SPAC, the in-vogue financial vehicle where investors raise money, take a blank-check entity public and later acquire a private company, taking a back-door route to an IPO. He thinks SPACs are particularly good for companies that want to go public quickly and that expect the market to change. “For us, we don’t believe you can time the market,” he says. “Our belief is that good things will happen one way or another.”
Opinions of SPACs are mixed across fintech. One venture capitalist at a large Silicon Valley firm says his best portfolio companies are only considering traditional IPOs and direct listings, not SPACs. Matt Harris, a partner at Bain Capital Ventures, thinks opinions are shifting. “The last six months have really started to change peoples’ minds about the benefits of SPACs,” he says. “In the past, it was so much more expensive to do a SPAC versus a traditional IPO … Now they’re getting more comparable.”