Corpay’s Investment in AvidXchange Addresses Key Market Gaps
Corpay’s investment in AvidXchange tackles a crucial functionality shortfall for the payments firm, aligning with growing demands for accounts payable automation within the underserved middle market. AvidXchange, a supplier of SaaS-based AP automation and payment solutions, digitizes and streamlines AP workflows for smaller enterprises.
Majority Ownership and Financial Commitment
Private equity firm TPG will retain the majority stake in AvidXchange. Corpay is injecting approximately $500 million to acquire a 33% equity share, with the transaction valued at $2.2 billion. The deal is anticipated to conclude in Q4 2025, contingent on shareholder and regulatory approval. It has already been endorsed by AvidXchange’s board.
The Pandemic’s Impact on AvidXchange
The pandemic highlighted AvidXchange’s potential when many businesses reevaluated their legacy processes in favor of more contemporary, digital solutions to enhance efficiency amid remote work scenarios. This shift accelerated the adoption of advanced financial tools among smaller firms, positioning AvidXchange well for market growth.
Corpay’s Strategic Acquisitions to Broaden Capabilities
The deal is part of Corpay’s ongoing strategy to enhance its B2B payment and automation services. In 2021, Corpay acquired Roger, a global AP software platform for small businesses, rebranding it as Corpay One. Later in the same year, Corpay purchased Accrualify, a cloud-based payment solution for mid-sized companies. With AvidXchange added to its portfolio, Corpay now offers a comprehensive suite of modular corporate payments products tailored for businesses of all sizes.
Market Representation and Customer Base Expansion
“These synergies offer significant potential,” noted Hugh Thomas, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research. “Corpay traditionally catered more to large enterprises, whereas AvidXchange’s customer base predominantly consists of middle market companies. Together, both entities gain better representation across segments, while Corpay secures an installed customer base for its mid-market solutions.”
Inorganic Growth Through Strategic Partnerships
Corpay recently sold a minority stake in its stock to Mastercard, enabling it to provide exclusive currency risk management and integrated large-ticket cross-border payment solutions to Mastercard’s financial institution clients. This move aligns with a broader trend of large providers seeking inorganic growth and a more expansive presence along the procure-to-pay value chain.