i3 Verticals, Inc. (NASDAQ:IIIV) was founded on September 7, 2012, formerly known as i3 Verticals, LLC (previously Charge Payment, LLC), and was re-registered as a Delaware company on January 18, 2018 , Headquartered in Nashville, Tennessee, USA, with 338 full-time employees (9/30/2018), aiming to provide seamless integrated payment and software solutions for small and medium enterprises and organizations in strategic vertical markets to achieve the perfection of software and payment Fusion.
i3 Verticals, Inc. (IIIV):
Since its inception, i3 Verticals has established a wide range of payment and software solutions to meet the specific needs of SMEs and other organizations in strategic vertical markets, and the company believes that its solution suite will differentiate the company from its competitors Come.
The main strategic vertical markets of i3 Verticals include education, non-profit, public sector, property management and healthcare. Compared with other industries, these vertical markets are huge and growing, and the adoption of electronic payments is increasing. In addition to the strategic vertical market, i3 Verticals’ position in the B2B (Business-to-Business) payment market is also growing. The company’s executive management team has a good track record in successfully establishing a listed payment company through organization and acquisitions. Achieve growth. The total payment processed by i3 Verticals in 2017 was approximately 10.3 billion U.S. dollars, growing at a compound annual growth rate (CAGR) of 67% since 2014.
i3 Verticals distributes its payment technology and proprietary software solutions to customers through a direct sales team and an expanding network of distribution partners, including independent software vendors (“ISV”), value-added distributors (“VAR”), independent sales organizations (“ISO”) and other recommended partners, including financial institutions. The company’s ISV partners represent an important distribution channel and enable the company to accelerate market penetration through a cost-effective one-to-many distribution model, which often leads to high retention rates and faster growth. From September 30, 2016 to September 30, 2017, i3 Verticals increased the network of independent software developers from 13 to 22, and the average monthly payment increased by 155%.
i3 Verticals’ integrated payment and software solutions have embedded payment functions tailored to the specific needs of strategic vertical market customers. The company’s configurable payment technology solutions are seamlessly integrated into customers’ third-party business management systems, provide security that complies with the Payment Card Industry Data Security Standard (“PCI DSS”), and include extensive reporting tools.
In addition to integrating with third-party software, i3 Verticals also provides its own proprietary software solutions to improve customer productivity and efficiency by simplifying its business processes (especially in education, property management and public sector markets). The company believes its proprietary software further differentiates the company from its competitors, enabling it to maximize payment-related revenue. Through its proprietary gateway, i3 Verticals provides customers with a single access point, supports various payment and software solutions, and realizes omni-channel point of sale (POS), including physical stores and electronic and mobile commerce, as well as APP-based payments.
i3 Verticals mainly focuses on strategic vertical markets, and the company believes it can become a leader in vertical focus, integrated payment and software solutions. The company’s strategic vertical markets include education, non-profit, public sector, property management, and healthcare. i3 Verticals has a long-term goal to become a leader in 6-10 strategic vertical markets. Enterprises and organizations in vertical markets often lack integrated payment functions in business management systems, and i3 Verticals’ solutions face less competition.
In many cases, i3 Verticals delivers its proprietary software solutions to strategic vertical markets through the payment facilitator (Payment Facilitator, PayFac) model. The company maintains a main merchant account, enabling customers to accept electronic payments through sub-merchant contracts. As more and more ISVs try to achieve differentiation by seamlessly integrating payment functions into their software solutions, the PayFac model has gained tremendous momentum for development. Before PayFacs came out, any company that wanted to accept credit cards needed to establish a personal merchant account, which was often expensive and time-consuming for small merchants. i3 Verticals’ PayFac solution simplifies and simplifies customer access, simplifies reporting and verification, and achieves excellent data management.
In addition to vertical markets, i3 Verticals’ business in the B2B payment field is also growing, which is one of the fastest growing areas in the payment field. According to the Nielsen report, approximately 75% of payments in 2016 were processed electronically. Compared with B2C payments, B2B payment market penetration is significantly lower. According to PayStream Advisors’ 2017 Electronic Payment Report, cheques account for more than 45% of B2B payments, providing opportunities for further adoption of card-based electronic payments and other electronic payments.
An important part of i3 Verticals’ long-term strategy is acquisition-driven growth (growth through continuous acquisitions). So far, the company has completed 9 “full platform” acquisitions and 12 “tuck-in” acquisitions. The company’s platform acquisition has opened up new strategic vertical markets, broadened its technology and solution suites, and expanded its customer base, while the i3 Verticals acquisition has increased the company’s existing payment and software solutions and added customers.
i3 Verticals mainly generates revenue through payment processing services, including but not limited to commission fees based on transaction amount provided to customers across the United States. The company’s payment processing services enable customers to accept electronic payments and facilitate the exchange of funds and transaction data between customers, financial institutions and payment networks. i3 Verticals’ payment processing services include merchant access, risk and underwriting, authorization, settlement, refund processing and other merchant support. i3 Verticals also derives revenue from software license subscriptions, ongoing support, and other POS-related solutions provided directly to customers through distribution partners.
i3 Verticals, Inc. (IIIV) investment:
i3 Verticals, Inc. (NASDAQ: IIIV) submitted its IPO prospectus on 5/25/2018, and listed on NASDAQ on 6/21/2018 with an issue price of US$13.00. It issued 6.65 million shares and raised US$86,450,000.