$225m into AvidXchange shows the American B2B paper payment dam maybe breaking

AvidXchange just closed a $225m round. Why would a bunch of very smart investors put $225m into something as boring as Accounts Payable software for small business? These are top tier investors:

  • TPG

TPG is a leading global private investment firm…

  • Square 1 Bank

entrepreneurs serving entrepreneurs

  • Keybank

Cleveland-based KeyCorp is one of the…

  • Nyca Partners

FinTech Venture Capital

  • Foundry Group

Foundry Group is a venture capital firm focused…

  • Bain Capital Ventures

Venture Capital & Growth Equity

Visitors to America, the source of so much of the technological innovation that drives our world, are often amazed by how backward B2B payment processing is. Accounts Receivable in a Supplier sends printed invoices by snail mail to Accounts Payable in a Buyer who keys in the data and then prints and sends a check and then….

Working Capital Finance is one of the biggest market opportunities in Fintech and none of those dreams are realizable unless invoices travel digitally.

New working capital finance models are getting traction today when the buyer is a big company which tells its small suppliers to issue invoices digitally. This has enabled Supply Chain Finance (SCF) to take off.

However small suppliers selling to a big buyer is only one part of working capital finance. Most small suppliers sell to small buyers.

That is where AvidXChange comes in. They are automating Accounts Payable processing for small business. The main way to automate Accounts Payable processing is to get your suppliers to send invoices electronically. If that starts to happen the great American B2B payment dam may finally break. When it is perceived that the norm is to send invoices electronically, the laggards still using paper will quickly follow. Then working capital finance will finally be revolutionized. My theory is that $225 million is the vote with the wallet from a bunch of smart investors that this is about to happen.

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