IFM agrees to ‘milestone’ sale of global paytech developer

IFM Investors has announced it has agreed to offload 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 sell its minority stake in Payapps – notable for being the IFM’s first investment for its second private equity fund – to US-based software development company Autodesk.

Autodesk is best known for developing AutoCAD, a mainstay drafting and design application for architects, engineers and designers.

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, reported to be worth hundreds of millions of dollars.

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

According to IFM, the paytech firm has grown strongly since its acquisition in late 2020, as the construction industry continued its transition “away from traditional paper-based processes to digital payment and communication application solutions”, accelerated by the Covid-19 pandemic.

IFM’s private equity funds have held a significant minority stake in Payapps, with the initial investment reported to be approximately $50 million.

IFM Investors’ global head of private equity Stuart Wardman-Browne hailed the “milestone” sale as an example of the firm’s 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 paytech, previously known as Zuuse, counts more than 40,000 users and over $75 billion of payment claims managed through the platform per annum.

IFM said it expects to complete the sale of Payapps next month.

Owned by a group of Australian pension funds, IFM oversees approximately $217 billion in funds under management.