Dive Brief:

• Paymentus, a billing management and payments company, raised $210 million in its initial public offering on May 26 after selling 10 million shares at $21 per share. The stock price surged about 45% on the first day of trading to just over $30, but settled back down and was trading at about $28 in morning trading today.

•  Paymentus reported $13 million in net income last year on $302 million in annual revenue, processed 195 million transactions from 1,300 billers and had 16 million monthly users in 2020, according to the company's S-1 financial statements.

• “The newly raised capital will be used to add and expand features on the platform,” Paymentus CEO Dushyant Sharma told Payments Dive. “We also aim to acquire companies that work in our vertical, which will help us to add capabilities and expand our platform to Europe, the Asia-Pacific region and the LatAm market in the coming year.”

Dive Insight:

Paymentus, a digital billing and payments company, raised $210 million in the May 26 IPO on Nasdaq. Paymentus shares surged 40-plus% to $30.37 and closed at $29 on the first day of trading, Bloomberg reported. 

The company digitizes billing and payments for merchants and customers along with providing data insights to its users. Paymentus plans to use the funds for company acquisitions in foreign markets, where Paymentus looks to grow its operations, and to expand its product line. 

The Redmond, Washington-based fintech aims to disrupt the “trillion-dollar bills payment” industry through digitizing billing and payments, Sharma said. 

There were approximately 128 million households in America that were paying an average of 10 bills per-month, according to Paymentus’ S-1 filing. Bill payments represented “58% of total monthly expenditures among U.S. adults in a recent survey by the Federal Reserve Banks, with total estimated bill payment spending exceeding $4.6 trillion in the United States in 2020,” the S-1 filing stated.  

“We aim to invest heavily in our Artificial Intelligence (AI) and machine learning capabilities to offer a better product to our users,” Sharma said. “For example, a customer can ask Alexa, ‘how much is my water bill this month and why is it higher than last month.’”

The company processed about $37.9 billion in transaction volume across a variety of industry verticals last year. Paymentus services are aimed at aiding merchants in utilities, insurance, auto-finance, mortgage and government billing sectors to digitize billing and payment procedures.

The company can cater to a variety of markets by way of some 15 billion unique transactional and behavioral data points collected from 195 million transactions last year, Sharma said. He added that the company plans on enhancing its platform to make digital billing and payments easier for its clients.

Currently, Paymentus works with international retailers like Walmart to simplify bill payments. It plans on expanding its services to European, Asia-Pacific and Latin American markets in the coming year, Sharma said. The company currently offers its bill management and payment services in 15 countries, he added.

The company aims to acquire its competitors and businesses that are working in the bills payment sector to get its foot in the door in foreign markets and scale operations in those locations, Sharma said.

“For 2021, our main focus will be the U.S. market as we see a lot of opportunities and growth potential here,” Sharma said. 

Paymentus acquired Billeo Inc., a digital bills payments company in 2015 for an undisclosed amount, according to TechCrunch. 

The company posted revenue of $301.8 million in 2020 compared to $235.8 in 2019 a 28% increase year-over-year. In Q1 2021, the company generated a revenue of $92.2 million compared to $69.6 million in Q1 2020.

Paymentus has been working with PayPal and Walmart since last year to create a global payments network where vendors can collect payments from customers instantaneously.

The company expects investors' interest to continue in the payments landscape as digital payments gain traction following the COVID-19 pandemic. 

“We have built a very large network already and, given where we stand, there is a huge market ahead of us, so for us, it was an IPO made the best sense,” Sharma said. “We want to continue to grow our business, and attract long term investors who want to participate in the journey of us building a large-scale business for decades to come."

Accel-KKR, a private equity firm investment fund, invested in Paymentus in 2011 and currently owns 70% of the company, Sharma said.

Flywire, a global payments company also went through an IPO on 26th May, raising $250 million on the first day of trading. It's stock also surged more than 40 percent, according to Bloomberg.