SPAC Mania Hits B2B
Billtrust goes Public via SPAC
If you are not familiar with Billtrust, you should be, they have been around for 19 years doing B2B payments. Last week I wrote about AP/Accounts Payable and all the funding rounds in those companies, well Billtrust is focused on AR/Accounts Receivable. From their SPAC deck:
“We are a leader in the digital transformation of accounts receivable and the future of B2B Payments” Billtrust SPAC deck
Some Billtrust stats to give context and scale to the story. (also from the SPAC Deck)
- $30+ billion in ACH and card payments processed in 2019
- 1,800+ Customers
- $1 trillion+ Invoice dollars processed since founding
- $49 billion+ Total payment volume
- $105 million 2020E Net Revenue
- 19% 2020–2022E Net revenue CAGR
- 40+ verticals served with in-depth expertise
These stats certainly make the $1.3B valuation seem justified. It is funny to me when newer companies have the $1B plus valuation but Billtrust is a 19 year old privately held company that has a solid business. I guess I am more old school than I care to admit.
Where does Billtrust sit in the B2B payments market? Here I show them in the Invoice to Cash side of my own CFO Tech Stack. They deliver e-invoicing and AR as compared to Bill.com or Tipalti that sit on the Procure to Pay / AP side of this chart.
So Billtrust is coming up on $100M in ARR, has thousands of customers and clearly a leading market position.
I have to say the part of their product story I like the most is their 3 year old Business Payments Network that they bill as the Venmo for B2B.
They are partnered here with all the right players on both sides of the Buyer / Seller relationship.
So why not IPO?
Billtrust’s CEO Flint Lane did an interview on Finledger where he was asked that question. I appreciate that Flint admitted being skeptical initially and thought the SPAC process was for companies that could not execute an IPO. He admits he was mid-informed. They engaged the JP Morgan Investment Bank for an education on how a SPAC could be the best path to the capital he required to grow Billtrust to the next level.
They were taken public via South Mountain Merger Corp which if you have been paying attention held Cardconnect previously before that was acquired by First Data. The acquiring vehicle was then called FinTech Acquisition Corp and the SPAC deck shows an 85% increase in value from when FinTech acquired Cardconnect to when they sold.
Flint already knew the former Cardconnect CEO, Chuck Bernicker that is now the CEO of South Mountain Merger, so that likely made the decision a lot easier.
Flint’s reasons for the SPAC:
“price certainty,
timeliness,
and the amount of capital we can raise” — Flint Lane CEO
That reads like a what is wrong with IPOs top three issues list and Flint makes that point in the Finledger interview as he opines:
“I would be surprised if people continue to go that route (IPO) with all the benefits that SPACs present. — Flint Lane Billtrust CEO
