Addressing Key Functionality Gaps with AvidXchange Investment
Corpay’s investment in AvidXchange tackles a critical functionality gap for the payments firm, aligning with the increasing demand for accounts payable automation among smaller enterprises. AvidXchange, offering SaaS-based AP automation and payment solutions, streamlines and digitizes AP workflows for medium-sized businesses.
Private equity firm TPG will retain control of a majority stake in AvidXchange following the acquisition. Corpay plans to invest around $500 million for a 33% ownership share in the company. The transaction is anticipated to conclude in Q4 2025, contingent on shareholder and regulatory approvals; it has already been approved by AvidXchange’s board.
The pandemic highlighted AvidXchange’s importance when many organizations sought more efficient digital tools over outdated manual processes. Driven by the need to adapt to remote work scenarios and mitigate inefficiencies, small and medium-sized firms accelerated their adoption of modern financial solutions. AvidXchange was well positioned to benefit from this trend.
Expanding into New Market Segments
This deal marks another acquisition for Corpay as it aims to diversify its B2B payment and automation services. In 2021, Corpay acquired Roger, a global AP software platform for small businesses, renaming it to Corpay One later in the same year. Additionally, Corpay integrated Accrualify, a cloud-based payment platform catering to mid-sized firms. With AvidXchange now part of Corpay’s portfolio, they offer flexible corporate payments solutions across various business sizes.
“There are substantial synergies here,” observed Hugh Thomas, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research. “Corpay traditionally focused more on large enterprises, whereas AvidXchange’s customer base is predominantly in the middle market. Combining both entities will provide better market representation for Corpay, along with an established customer base for their mid-market solutions.”
Fueling Inorganic Growth
Corpay recently sold a minority stake to Mastercard, becoming the exclusive provider of currency risk management and integrated large-ticket cross-border payment solutions for Mastercard’s financial institution clients. This strategic partnership underscores a broader trend among large providers seeking inorganic growth and expanded presence across the procure-to-pay value chain.
According to Thomas, “This development, alongside the recent Mastercard announcement, signals a growing desire among major players to pursue acquisitions for inorganic growth and enhance their position within the overall payment ecosystem.”