IFM agrees to ‘milestone’ sale of paytech

Payapps Sale IFM

IFM Investors has announced it has agreed to the sale of its minority stake in Payapps, a payments technology developer for the construction sector, to a Nasdaq-listed multinational software-as-a-service (SaaS) development firm.

IFM will offload its minority stake in Payapps – notable for being the first investment for its second growth fund – to Autodesk, perhaps best known for developing AutoCAD, a mainstay drafting and design application for architects, engineers and designers.

The transaction is expected to be completed next month.

The sale marks the first exit for IFM’s second growth fund, and follows the recent sale of NDIS plan manager provider, My Plan Manager, to Arthur J. Gallagher & Co, with this deal reported to be worth several hundreds of millions of dollars.

IFM’s investment in Payapps was the first to combine its new private equity growth fund and its single client mandate to invest in mid-market growth companies.

The paytech firm has grown strongly since its acquisition, according to IFM, with the construction industry continuing to “move away from traditional paper-based processes to digital payment and communication application solutions”, accelerated by the Covid-19 pandemic.

Since late 2020, IFM’s private equity funds held a significant minority stake in Payapps – reported to be worth approximately $50 million.

Welcoming the “milestone” sale, IFM Investors’ global head of private equity, Stuart Wardman-Browne, said the divestment marks the “latest in a series of transactions for IFM’s Private Equity Team and is an example of our focus on building businesses with long-term growth ambitions alongside strong demand for their services”.

Among the growth initiatives to be undertaken with IFM include the:

  • Investment in product development, sales and marketing, and the more than doubling in headcount since IFM’s investment;
  • Implementation of multiple new sales channel partnerships and integrations;
  • Execution of a strategic bolt-on acquisition of WebContractor, expanding Payapps’ UK footprint; and
  • Implementation of a new invoice financing product to monetise the payment flow.

Based in Melbourne and launched locally in 2016, Payapps operates in Australia, North America (under the GCPay brand), the United Kingdom, Ireland and New Zealand. The firm counts more than 40,000 users and over $75 billion of payment claims managed through the platform each year.

IFM Investors, which is owned by a group of Australian pension funds, oversees approximately $217 billion in funds under management.