Last week, AvidXchange became the latest homegrown company to go public.
The company debuted on the Nasdaq under the ticker AVDX.
Why it matters: The local fintech company’s initial public offering marks the latest step in Charlotte’s evolution into a technology town. In the last few years, the city’s welcomed major tech job expansions from companies such as Centene, Lowe’s. Arrival, Better.com and Moody’s.
Charlotte has come a long way over the last few decades, and the local economy is bolstered these days by far more than just banking.
City Councilman Tariq Bokhari, who heads the fintech-focused nonprofit Carolina Fintech Hub, says AvidXchange’s IPO has significant trickle-down effects for the city’s entire technology industry.
“In the immediate term we’re going to benefit immensely just from the notoriety,” Bokhari says.
That means if tech leaders overseas or across the country hadn’t heard of Charlotte before, they can now associate it with big names like AvidXchange, he adds.
- Groups like Carolina Fintech Hub have been working for years on growing the city’s tech brand and supporting startups. Last week, the group launched an accelerator program called Meta Lab, which will work with partners like U.S. Bank to help startups with things like business development and recruiting.
Flashback: In 2000, entrepreneurs Michael Praeger and David Miller founded AvidXchange, which focuses on automating bill payment and invoicing systems for mid-sized companies.
- “It was just two guys meeting in a coffee shop … in Charlotte with a wild idea about how we could change the way companies do business,” Praeger, the company’s CEO, said last week during a ceremony at the company’s Charlotte headquarters.
- The company grew over the years organically and through acquisitions, including Salt Lake City-based Piracle, which AvidXchange acquired in 2014.
- AvidXchange moved into its newly built headquarters at the Music Factory in 2017.
Sometime that year, the company’s valuation reached $1 billion, making it a so-called unicorn.
In 2018, the company announced plans to open a corporate office in Salt Lake City, as I wrote for the Observer at the time. Also that year, the company announced plans to hire more than 1,200 new employees, doubling its local footprint, over five years in exchange for more than $22 million in state and local incentives.
Today, AvidXchange has 1,500 employees across seven office locations, including more than 1,000 in Charlotte, a company spokesperson said.
The IPO will likely usher in further growth for AvidXchange.
In a securities filing last month, the company said it intends to use the proceeds from the IPO on headcount expansion, investment in sales and marketing, product development, acquisitions and other uses.
- “Today’s the day every tech entrepreneur dreams of when they start their company,” Praeger said during the IPO celebration last week.
AvidXchange declined to make any executives available for an interview with Axios. In an email, Coffman provided a statement that called the IPO an “incredible milestone” for the company.
“We remain dedicated to connecting buyers and suppliers through our two-sided network to enable electronic payments and act as the catalyst for digital transformation,” the company said in the statement.
The big picture: AvidXchange’s IPO also provides a significant windfall for the company’s early investors, whom Praeger acknowledged last week as having been “very, very, very patient” over the years.
Nearly two decades ago, Charlotte leaders from a range of industries each invested at least $50,000 into a fund “aimed at finding big returns by investing in young companies,” as the Charlotte Ledger recently reported.
- One participant estimated the initial $50,000 investment on the entire fund is worth nearly $500,000 today, per the Ledger.
- Furthermore, Praeger owns about 7.4% of the company’s shares, which are now worth about $350 million, the Observer reported.
The company’s IPO will further improve young entrepreneurs’ access to capital, says Bokhari, who describes Charlotte as long having been risk averse, a place “that looks with a skeptical eye at things like blockchain.”
“This is going to go a long way. There’s a lot of capital locked up in this town,” he says.