FinTech-Centered SPACs, Platform IPOs Dominate October’s First Week

Special purpose acquisition companies (SPACs) continued to dominate the listings landscape in the past week, with particular focus firms on FinTechs and real estate combinations. Platform firms, too, continue to grab their share of headlines.

Over the last several days, the number of payment-related announcements increased to 32 listings, the banking sector stood at 54 and firms geared to improving workflows stood at 42.

Amid the most visible headlines of the week: Accounts payable (AP) solution AvidXchange Inc. is looking to go public with a half-billion-dollar initial public offering (IPO). As PYMNTS reported last month, AvidXchange’s core business involves suppliers submitting invoices to its two-sided platform. Buyers will approve those invoices and payments once they’re integrated with the accounting system. From there, payments are executed through the network using the suppliers’ chosen methods.

In an S1 filing, the company said it had more than 7,000 buyers on its platform at the end of FY 2020, with more than 700,000 suppliers paid between 2015 and 2020. AvidXchange processed around 53 million transactions during the fiscal year 2020.

Read more: AP Firm AvidXchange Looks at $506M IPO

Runways, Too 

As noted in this space earlier in the week, Rent The Runway’s filing with the Securities and Exchange Commission (SEC) for a public listing shows a rebound from the pandemic in terms of subscriber count and active subscribers.

The company noted in its filing that as many as 80,000 retailers, or 9% of stores, will close their doors through the next five years. Direct to consumer has become an “essential channel” for every brand, said Rent the Runway.

Drilling down into the numbers, the subscriber base tallied a bit more than 95,000 in the latest fiscal year, which was down from nearly 147,900 in the previous year. The number of active subscribers declined from more than 133,570 in the fiscal year that ended in January 2020 to just under 54,800 in the January 2021 period.

But the rebound seems underway: From the depths of the pandemic, through the six-month period that ended in July, the company had more than 126,800 total subscribers, where there were more than 97,600 active subscribers.

Read also: Rent the Runway Sees Subscribers Rebound From Pandemic’s Depths 

Some Smaller Deals

Drilling down a bit, ExcelFin Acquisition, a blank check company formed by Fin Venture Capital and Grand Fortune Capital targeting FinTech, filed on Tuesday with the SEC to raise up to $200 million in an initial public offering. In the filing, the company said, “we intend to focus our search on a U.S. domiciled Financial Technology (‘FinTech’) company and will leverage our deep domain expertise, investing track record, and extensive networks in order to pursue a business combination with a high-quality growth-oriented company in the FinTech business-to-business (B2B) software-as-a-service sector.”

With a nod to the investment criteria, the company said in that same filing that it will seek to acquire a business that has grown consistently year over year, has a defensible recurring revenue model and sustainable gross margin profile.

“We are targeting companies with trailing twelve month ARR of greater than $75 million with 50%+ growth rates, 70%+ gross margin profile, and strong net revenue retention with low churn,” ExcelFin said.  The valuation range will be between $750 million to $2 billion.

Elsewhere, in the real estate space, SPAC said it had priced a $200  million IPO, having stated in its filing that, “While we may pursue a target business in any industry or sector, we initially intend to focus on target businesses that manage, finance, operate, construct, control, or support real estate or which derive a large component of revenue from real estate, construction or infrastructure related activities.”

Also in the real estate sector, Tricon Residential, based in Canada, said this week that it filed for a $350 million IPO in the U.S. The company operates a platform focused on single-family residential homes. In its filings, the company said is focused on homes in the U.S. Sun Belt, with approximately 25,000 homes in 19 markets across 10 states. Tricon offers middle-market families the convenience of renting a high-quality, renovated home without costly overhead expenses such as maintenance and property taxes.

In another example of Canadian firms crossing the border south, as it were, Nuvei, a Canadian firm that provides payment processing technology to merchants and eCommerce platforms, filed with the SEC to raise as much as $183 million in an IPO.

Read also: Nuvei Offers 1.5M Voting Shares in US IPO