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AvidXchange IPO launches: What makes AP Automation so attractive for investors compared to other technology areas (Part 2)

10/15/2021 By

This week, AvidXchange went public with its IPO, and our analyst team published a Spend Matters PRO brief that covered the functional components of AP automation and B2B payments technology, providing insight into how these two capabilities interoperate and why they are particularly valuable to users (SME firms, middle market companies and large enterprises alike). In essence, the intersection of these two areas explains the growth and success of AvidXchange in targeting primarily SME organizations. There’s a highly rational and prioritized need for both, especially during a time where digital automation is critical in tight labor markets and cash remains king.

But there is more to looking at the intersection of AP automation and B2B payments technologies (not to mention AR, working capital, treasury and related areas) from an investment thesis potential than simply the primary business use cases today. This Spend Matters PRO coverage fleshes out three of my own hypotheses for why this market, from an investment perspective, is likely better than just about all others in procurement technology (let alone enterprise technologies generally).

Let me share a quick word of caution before I start: This research brief breaks with recent Spend Matters tradition and is based on qualitative insights from discussions with friends in the industry and investors. I do quote from our previous insights, which I think is necessary to make the arguments that I’m about to share. (If you want hard benchmark data and analysis of vendors and the market, read the work of my colleagues!)

This article requires a paid membership that has access to AP Automation / Invoice-to-Pay.
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