Addressing Key Functionality Gaps with AvidXchange
Corpay’s investment in AvidXchange targets a critical functionality gap for the payments firm, addressing the increasing demand for accounts payable automation among smaller enterprises. AvidXchange, known for its SaaS-based AP automation and payment solutions, streamlines and automates AP workflows for mid-sized businesses.
Equity Investment Details
Private equity firm TPG will own the majority of AvidXchange’s shares. Corpay plans to invest about $500 million for a 33% stake in the company. The transaction, valued at $2.2 billion, is anticipated to close in Q4 2025, pending shareholder and regulatory approval. The deal has already been endorsed by AvidXchange’s board.
The Pandemic’s Impact
The pandemic played a significant role in putting AvidXchange on the map. Many businesses leveraged this period to reassess and replace their traditional processes with more modern digital solutions, driven by remote work scenarios and the inefficiencies of manual operations. This shift hastened the adoption of digital financial tools among smaller firms, positioning AvidXchange well to capitalize on these trends.
Expanding Market Segments
The acquisition is part of Corpay’s strategy to broaden its B2B payment and automation capabilities. In 2021, Corpay acquired Roger, a global AP software platform for small businesses, relabeling it as Corpay One. A year later, the company added Accrualify, a cloud-based payment platform for mid-sized companies. With AvidXchange now part of the lineup, Corpay offers a modular corporate payments product suitable for businesses of all sizes.
“These potential synergies are substantial,” stated Hugh Thomas, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research. “Corpay has traditionally focused on larger enterprises, whereas AvidXchange’s customer base spans the middle market. This deal allows both entities to gain better segment representation, with Corpay gaining an established customer base for its mid-market solutions.”
Fueling Inorganic Growth
Corpay has also recently sold a minority stake in its company to Mastercard, making it the exclusive provider of currency risk management and integrated large-ticket cross-border payment solutions for Mastercard’s financial institution clients. This partnership is indicative of a growing trend among larger providers seeking inorganic growth and broader presence across the procure-to-pay value chain.
According to Thomas, “This development, coupled with the recent Mastercard announcement, underscores the general desire among large providers for inorganic growth and a more comprehensive market presence.”