Cloud-based electronic billing company Paymentus Holdings plans to go public this week through an IPO. Here are all of the details.
Based in Redmond, Wash., Paymentus Holdings is looking to raise $210 million through the sale of 10 million shares. The shares will be priced between $19 and $21. The company’s expected valuation is $2.4 billion.
The company will trade on the NYSE under the ticker symbol “PAY.”
The underwriters of the Paymentus IPO include Goldman Sachs, J.P. Morgan, BofA Securities, Citigroup, Baird, and Wells Fargo Securities.
Tech investor Accel-KKR owns controlling equity in Paymentus.
According to the SEC filing, the company’s existing investor, Accel-KKR (AKKR), will purchase $50 million of Class A shares in a concurrent private placement and at the same share price as the IPO.
AKKR is a technology-focused investment firm with over $10 billion in capital commitments. The firm acquired a controlling equity interest in Paymentus in 2011.
About $57.4 million of the proceeds from the Paymentus offering will be used to redeem all of the Series A stock shares held primarily by AKKR and company founder and chief executive officer, Dushyant Sharma.
The rest of the proceeds will be used for “general corporate purposes,” including working capital, operating expenses, and capital expenditures. The company might also use the funds to acquire or invest in other businesses, products, services, or technologies.
What is Paymentus?
When Sharma founded Paymentus 17 years ago, he was looking to disrupt the world of bill payments, which was mainly paper-based.
“I started Paymentus to solve a decades-old problem – the complexity of bills and payments. Every year, billions of paper bills are paid by billions of paper checks, and there is an inherently flawed application of technology to the same paper paradigm. This problem touches consumers and businesses in the country and around the world,” Sharma wrote in a letter included in the SEC filing.
The Paymentus bill payment system is used by a variety of industries, including utilities, financial services, insurance, government, telecommunications, and healthcare.
Paymentus saw revenue growth during the COVID-19 pandemic.
Paymentus has grown over the years as more consumers and businesses turn to online payment systems. The growth even continued during the COVID-19 pandemic. In 2020, Paymentus processed over 195 million transactions for its more than 16 million monthly users.
The company also saw a boost in revenue. Its revenue in 2020 was $302 million, up 28 percent YoY. The net income was $13 million for that same year.
In the first quarter of 2021, the revenues were up to $92.2 million, which is a 32 percent jump over last year.
At the heart of the Paymentus bill payments ecosystem is its proprietary Instant Payment Network, or IPN. PayPal and Walmart were the first companies to partner with the Paymentus IPN. The company plans to attract more IPN partners.
“I founded Paymentus to disrupt the bill payment ecosystem, and I am more excited than ever about our ability to create value for our billers, partners, consumers, and now, public stockholders,” Sharma wrote in the prospectus.