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Shares of Paymentus Holdings Inc. are heading higher in the company’s stock-market debut as investors bet on a company hoping to modernize the most archaic aspects of consumer bill payments.
Paymentus shares
PAY,
opened at $28.76 Wednesday, 37% above their initial-public-offering price of $21, which came at the high end of the company’s expected pricing range of between $19 and $21 a share. The stock recently changed hands at $28.98.
After offering 10 million shares in the IPO, Paymentus raised $210 million. The company will give underwriters a 30-day option to purchase an additional 1.5 million shares.
With a total of about 116.0 million shares outstanding after the IPO, the company was being valued at roughly $3.4 billion at current prices.
The payment-technology company aims to simplify the process of bill payments, a category that saw nearly $5 trillion of consumer spending in the U.S. last year, according to Chief Executive Dushyant Sharma. He calls Paymentus “an operating system for billing companies” that lets them add more modern features, like mobile-wallet acceptance, to the process of collecting bill payments from customers.
Paymentus generated $301.8 million in revenue during 2020, up 28% from a year earlier. Net income was flat at $13.7 million.
The company works across industries, helping companies collect payments in the utilities, insurance, telecommunications, and financial-services areas, among others. Paymentus processed the bulk of its volume in the utilities category last year, at 57%.
Paymentus works with software partners like Oracle Corp.
ORCL,
that integrate the company’s technology into their own software. The company also has a variety of financial-services partners, including PayPal Holdings Inc.
PYPL,
and some big U.S. banks, which enable bill payments within their apps and platforms.
While people may be familiar with receiving an email about a new bill and entering their credit-card numbers on an online form, Paymentus gives its partners the option to add newer payment options, including PayPal’s Venmo service or Amazon.com Inc.’s
AMZN,
Amazon Pay.
Sharma told MarketWatch that the company has seen traction from billers looking to unify their collection of payments across various channels. In addition to processing payments that consumers make through online links, the company offers ways for billers to collect payments from people phoning call centers, without call-center representatives gaining access to sensitive financial credentials.
Paymentus’s IPO comes as the Renaissance IPO ETF
IPO,
has lost 9% over the past three months and as the S&P 500
SPX,
has risen 10% in that span.
