Digital Banking Software Provider Alkami Taps Goldman Sachs For IPO Prep, Report Says

U.S.-based banking software company Alkami Technology is planning an initial public offering (IPO) that could be valued at $3 million, Reuters reported on Monday (Feb. 22).

Alkami has also chosen Goldman Sachs to lead the preparations for the IPO.

The company, based in Plano, Texas, supplies cloud-based platforms that banks can use to provide digital operations for clients.

The company’s IPO comes as the pandemic has shone a light on what kinds of digital services are necessary for a company to survive in an environment where working from home makes the most sense. As smaller banks usually lack the resources to develop their own such systems, they often turn to third-party solutions like Alkami.

Alkami’s backers include General Atlantic, D1 Capital Partners and Fidelity Management and Research Company, Reuters wrote.

The company has been raising money since September, including $140 million from a private valuation. At that time, the company said it had a $130 million annual recurring revenue.

MeridianLink, backed by Thoma Bravo, has hired banks for a public listing, Reuters wrote. The investor interest in software companies should be a boon for Alkami and MeridianLink. NCino, a banking software provider, listed in July, pricing its IPO above its already increasing price range. The company continues to trade above its IPO price by over 150 percent, Reuters writes.

As businesses navigate the complexities of the pandemic, they’re finding that the cloud could be the solution for safe scalability and practices.

The shift could be a result of many companies realizing that even when legacy actions keep up with the digital shift, the boundaries of what they can do are pushed to the limits by what is currently needed.

Michael Morris, head of technology at Australian FinTech Up, told PYMNTS that the best thing banks can do is to begin acting like technology firms, especially as tech firms begin to encroach on banks’ territory more and more.