AvidXchange, which has developed a Web-based purchasing management system for the commercial real estate industry, is expected to announce today that it has closed on its second round of venture funding.
The company has landed $1.75 million from CT Communications, Charlotte Angel Partners and individual investors, President David Miller says. Concord, N.C.-based CT announced its participation in the round in May, by which time the company had closed on about half of the final amount, Miller says.
“We’re very close to the point where we’re self-funding, and this will get us there,” he says, noting that this likely could be AvidXchange’s last round of private equity. It has raised a total of $3.5 million in the two rounds.
The two-year-old company will use the new money to finance its continued growth, including opening offices in New York and Chicago and expanding its customer service and technology departments at its Charlotte headquarters, he says. The company currently employs 17.
“We’re sort of proving our model,” Miller says. “Even in bad times, there are opportunities for us, so if we continue to push forward, more opportunities will come.”
AvidXchange’s system allows commercial real estate firms to set up competitive bidding online among suppliers and contractors and then follow through with a purchase from the winning bidder. Company officials have said the slumping real estate market has helped drive their growth, as landlords look for ways to save money and streamline their back office operations.
Although the company doesn’t disclose financial information, Miller says revenue has been on a steep upward trend in recent months. AvidXchange has doubled its client base from a year ago and now has about 20 clients, he says.
Already this year, AvidXchange has signed up CarrAmerica Realty, which owns about 300 office buildings in markets from Atlanta to Seattle, and Mills Corp., one of the nation’s leading owners of outlet malls, including Concord Mills near Charlotte. Another eight to 10 new clients are projected for the third quarter, Miller says.
“There’s an enormous pipeline that we’ve built up, and we just want to take advantage of that momentum,” he says.
Customer growth impresses
Brent Kulman of Charlotte Angel Partners has followed AvidXchange from early on, and the company’s ability to land a steady stream of customers is what finally attracted the attention of the members of his group.
“They have made significant strides in getting customer acceptance,” Kulman says. “They are adding new customers at a pretty active clip. A number of competitors in the market are falling by the wayside, which points to the quality of their technology and the opportunities for them in the future.”
Charlotte Angels members also were impressed with the management experience of Miller and co-founder Mike Praeger, who serves as the company’s chief executive officer. Both are dot-com veterans who have created and sold other technology firms over the past several years.
In addition to fueling sales growth, Miller says, the new funding will allow AvidXchange to expand into related products for the commercial real estate industry, such as adding wrinkles to its online invoicing and payment processing system.