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Alkami: A Fast-Growing Fintech Firm In A Hyper-Competitive Market

Apr. 07, 2021 10:10 PM ETAlkami Technology, Inc. (ALKT)1 Comment
Noah Wilson profile picture
Noah Wilson


  • Alkami is one of a rising number of tech companies emerging in nontraditional areas.
  • The company has consistently grown revenues, thanks to a fast-growing addressable market.
  • Yet, the attractive growth rates possible in Alkami’s market create conditions in which there is hyper-competition and Alkami cannot turn a profit.
  • Investing in Alkami is a bet that it will achieve minimum viable scale and long-term profitability, but this is a bet that seems too risky to place at this stage of the company’s lifecycle.

Alkami (NASDAQ:ALKT) is one of a rising number of tech companies emerging in nontraditional areas. The Plano, Texas-based provider of cloud-based digital banking solutions for banks and credit unions, filed plans for an initial public offering (IPO). According to Crunchbase, the company has raised a total of $385.2 million. Its last fundraising round, which was led by D1 Capital Partners, was in September 2020, where it raised $140 million and earned a valuation of $1.44 billion on a post-money basis.

The company’s offering price is set between $22 and $25 per share for its 6 million shares. This would raise between $132 and $150 million for the company. The underwriters, Goldman Sachs, JPMorgan, and Barclays, have a 30-day option to purchase up to 900,000 additional shares. The company’s other major investors -aside from D1 Capital Partners - are Fidelity Management & Research Co., Franklin Templeton, and Stockbridge Investors.

After the IPO, General Atlantic will own 22.5% of the company, with S3 Ventures taking 22.3%, Argonaut Private Equity taking 15.2% and D1 remaining with just 5.3%. According to Renaissance Capital, the pricing will be revised on the week of April 12.

The Alkami Platform

Alkami delivers its banking solutions through the cloud. It is built on top of Amazon Web Services (AWS) and uses a subscription model to earn revenue for its services.

According to the company’s S-1 filing, its core market is “community, regional and super-regional financial institutions." Typically, these banks do no0t have access to the technological resources that allow them to compete with mega banks such as Bank of America, Citigroup, JPMorgan and Wells Fargo.

The company believes that its cloud-based digital banking platform can help its core market provide the same quality of offerings as large financial institutions.

Through the company’s cloud platform, its users can provide their

This article was written by

Noah Wilson profile picture
I'm an independent investor with experience trading forex, cryptocurrency and stocks. I'm particularly interested in tech and biotech stocks with a long term growth philosophy. Originally from the UK, I worked for Barclays bank in London for 10 years before moving to the East coast of England. I currently run several online businesses while writing about investment as a hobby. None of the views I express should be taken as investment advice and is purely my own musings on a stock's investment potential.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (1)

Throw the word digital and platform and you can go IPO. Had a hard time understanding what they provide from their website. Wonder if they are touting it as a replacement for the core banking system.
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