Banking tech company Alkami plans blockbuster $2B IPO

Alkami, a 12-year-old Texas-based banking technology startup with a cloud-based platform for banks and credit unions, announced an initial public offering (IPO) at a $2B valuation.

Why should we care?
Alkami, which is based in the Dallas suburb of Plano, offers an Amazon Web Services-based banking infrastructure platform that covers user onboarding, engagement, and account servicing for both retail and business banking. Alkami’s mission is to level the playing field for community, regional, and super-regional financial institutions, allowing them to compete with large, well-resourced incumbents. “Our typical relationship with [clients] begins with a set of core functional components, which can extend over time to include a rounded suite of products across account opening, card experience, financial wellness, fraud protection and marketing,” the filing said. In 2020, Alkami served 9.7 million registered users, had a revenue of $112.1M, and the company incurred net losses of $51.4M. Competitors include established core providers like Fiserv and newer players like Q2. A crowded space is one of the key risk factors it identified in its IPO filing: “We anticipate continued challenges from current competitors, including point solution vendors and core processing vendors, many of whom are well-established and enjoy greater resources, as well as from new entrants into the industry, which could include well-established companies with distinct advantages, such as cloud providers, search providers, social media providers,” the company said.