Corpay’s Investment in AvidXchange
Corpay’s investment in AvidXchange fills a crucial function within the payments firm, responding to an increasing demand for accounts payable automation among smaller businesses. AvidXchange specializes in SaaS-based AP automation and payment solutions, streamlining workflow processes for enterprises.
The private equity firm TPG will retain a controlling interest in AvidXchange after the acquisition. Corpay is set to invest roughly $500 million for a 33% share in the company. The transaction, valued at $2.2 billion, is projected to finalize in Q4 2025, pending shareholder and regulatory approval. The deal was recently sanctioned by AvidXchange’s board.
Impact of the Pandemic on Market Dynamics
The pandemic highlighted the need for digital transformation within many small businesses. As remote work became more prevalent, inefficiencies in manual operations pushed companies to adopt modern financial tools. AvidXchange, already recognized for its automation solutions, was well-positioned to benefit from this shift.
Expanding Market Reach
Corpay has been consistently growing through acquisitions, aiming to enhance its B2B payment and automation offerings. In 2021, the company acquired Roger, a small business AP software platform, which was later rebranded as Corpay One. A year later, Corpay acquired Accrualify, a cloud-based payment solution for mid-sized firms. The addition of AvidXchange widens Corpay’s product suite to cater to businesses of all sizes.
“These moves indicate significant potential synergies,” stated Hugh Thomas, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research. “Corpay traditionally targeted larger markets, while AvidXchange operates in the middle market. The combination provides better coverage for both segments, and Corpay gains a customer base for its mid-market solutions.”
Promoting Inorganic Growth
Additionally, Corpay recently sold a minority stake to Mastercard, establishing it as the exclusive provider of currency risk management and large-ticket cross-border payment services for Mastercard’s financial institution clients. This collaboration underscores a broader industry trend toward inorganic growth and an expanded presence throughout the procurement-to-pay process.