Addressing Key Functionalities through Investment

Corpay’s investment in AvidXchange fills a critical gap for the payments firm, aligning with the increasing demand for accounts payable automation in underserved mid-market enterprises. AvidXchange, a provider of SaaS-based AP automation and payment solutions, streamlines and automates AP workflows for smaller businesses.

Financial Details and Timeline

Private equity firm TPG will retain control over the majority of AvidXchange’s shares. Corpay plans to invest around $500 million to acquire a 33% stake in the company. The transaction, valued at $2.2 billion, is projected to conclude in Q4 2025, pending shareholder and regulatory approval. This deal was endorsed by AvidXchange’s board.

AvidXchange’s Rise Amid Pandemic

The global pandemic propelled AvidXchange into the spotlight as many businesses reconsidered their traditional processes for more advanced, digital alternatives to cope with remote work and the inherent inefficiencies of manual operations. This shift hastened the adoption of modern financial tools among smaller companies, positioning AvidXchange to leverage this trend.

Expanding Market Reach

The acquisition is part of a broader strategy by Corpay to expand its B2B payment and automation services. In 2021, Corpay purchased Roger, a small business AP software platform, rebranding it as Corpay One. Later in the year, Corpay acquired Accrualify, a cloud-based payment solution for mid-sized companies. Adding AvidXchange, Corpay now offers flexible corporate payments products suitable for businesses of varying sizes.

Fueling Inorganic Growth

Additionally, Corpay recently sold a minority stake in its stock to Mastercard, enabling it to provide currency risk management and integrated cross-border payment solutions exclusively for Mastercard’s financial institution customers. This partnership underscores the increasing demand among major providers for inorganic growth and a comprehensive presence across the procure-to-pay value chain.