i3 Verticals Bundle
What is i3 Verticals?
i3 Verticals is a technology and payments company that has carved out a niche in integrated software and payment solutions. It was founded in 2012 with the goal of merging payment capabilities into software products.
The company has strategically shifted its focus, divesting certain business segments to concentrate on being a public sector software provider. This move has positioned it as a key player in enterprise software for government and educational sectors.
The history of i3 Verticals is marked by strategic evolution, particularly with its significant transformation in late 2024 and early 2025. This period saw the divestiture of its Merchant Services and Healthcare Revenue Cycle Management businesses. This strategic move allowed the company to sharpen its focus and emerge as a pure-play public sector software provider. This realignment has solidified its market position, with thousands of installations across all 50 U.S. states and Canada. For a deeper dive into the external factors influencing its operations, consider an i3 Verticals PESTEL Analysis.
What is the i3 Verticals Founding Story?
The i3 Verticals company history began in 2012 in Nashville, Tennessee. Greg Daily, a seasoned professional in the payments sector, established the company, with Saranya Kumar also recognized as a co-founder. Their vision was to integrate payment processing directly into specialized software for underserved industries.
i3 Verticals Company Origins
Founded in 2012, i3 Verticals emerged from a strategic vision to bridge the gap between payment processing and industry-specific software. The company's early focus was on creating integrated solutions for niche markets.
- i3 Verticals was founded in 2012.
- Greg Daily is the Chairman & CEO and a primary founder.
- Saranya Kumar is also cited as a co-founder.
- The company's initial strategy involved acquisition-led growth.
The founding principles of i3 Verticals centered on providing seamless payment and software integration, moving beyond traditional payment gateways. This approach aimed to offer businesses more efficient and embedded financial transaction capabilities. The initial business model relied on transaction fees and recurring software subscriptions, supported by private capital to fuel its expansion. This strategy was particularly effective in the early 2010s, a period characterized by increasing digitalization and a growing demand for specialized business solutions, aligning with the Target Market of i3 Verticals.
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What Drove the Early Growth of i3 Verticals?
Since its founding in 2012, i3 Verticals has experienced a dynamic journey of growth and strategic repositioning. The company's early years were marked by a series of acquisitions designed to build a robust platform and expand its market presence.
Founding and Early Acquisitions
Established in 2012, i3 Verticals quickly began its expansion through strategic acquisitions. Key early moves included acquiring Axia Payments in June 2016, Esber Cash Register and Bill & Pay in April 2016, and Randall Data Systems in February 2017, broadening its service capabilities.
Public Offering and Continued Expansion
A significant milestone in the i3 Verticals company history was its 2018 IPO on Nasdaq, raising approximately $60 million. This capital fueled further acquisitions across Public Sector, Healthcare, and Education verticals through 2023, integrating payment processing and driving revenue to $360.7 million by fiscal year 2023.
Strategic Divestitures and Refocus
In a strategic shift, the company divested its Merchant Services business to Payroc for $438 million in September 2024. This was followed by the sale of its Healthcare RCM business to Infinx for $96 million in May 2025, sharpening its focus on software and services.
Current Business Focus
Following these divestitures, the company's revenue mix is now approximately 75% software and related services, with 25% from payments and other services. The primary focus remains on integrated software solutions for government, education, and healthcare markets, reflecting its evolving business development history.
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What are the key Milestones in i3 Verticals history?
i3 Verticals has marked significant progress through strategic innovations and key milestones, including recognition by Inc. and Deloitte as a fast-growing company and inclusion in the Global Payments Technology Innovation Index for four consecutive years. The company's journey reflects a commitment to evolving its offerings, adapting to market shifts, and focusing on its core strengths in public sector software solutions.
| Year | Milestone |
|---|---|
| Ongoing | Consistent focus on developing and integrating payment functionalities within proprietary vertical market software. |
| Consecutive Years | Inclusion in the Global Payments Technology Innovation Index. |
| September 2024 | Divestiture of its Merchant Services business. |
| May 2025 | Divestiture of its Healthcare RCM business. |
A primary innovation has been the seamless integration of payment functionalities directly into its vertical market software, enhancing client operations. Future advancements are set to leverage Artificial Intelligence (AI), with initial 2025 releases including an AI service agent for transportation and an automated indexing module for ERP systems, aiming to boost efficiency and user outcomes.
Integrated Payment Solutions
Developing and embedding payment capabilities directly within its specialized software for various industries.
AI-Powered Enhancements
Implementing AI service agents and automated modules to improve operational efficiency and client results.
JusticeTech Integration
Establishing partnerships, such as with the West Virginia Supreme Court of Appeals, to integrate specialized JusticeTech solutions.
Strategic Divestitures
Streamlining the business by divesting non-core segments to focus on high-growth public sector software.
Growth Recognition
Achieving recognition as one of the fastest-growing companies in the United States by prominent publications.
Market Adaptability
Demonstrating agility in responding to market dynamics and competitive pressures through strategic business adjustments.
The company has navigated challenges including fluctuating government spending, competitive pressures in sectors like utilities, and the complexities of integrating acquired businesses. Forecasting software license sales also presented potential seasonality issues, requiring careful management.
Competitive Landscape
Facing dynamic market conditions and competition, particularly in established sectors.
Forecasting Difficulties
Potential for seasonality distortions in forecasting software license sales.
Government Spending Uncertainty
Navigating the unpredictable nature of state and local government budget allocations.
Acquisition Integration
Managing the operational and service quality aspects of integrating multiple acquired companies.
Market Dynamics
Adapting to evolving industry trends and customer demands for specialized software.
Strategic Realignment
Executing significant business divestitures to sharpen focus and strengthen financial position, as detailed in the Marketing Strategy of i3 Verticals.
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What is the Timeline of Key Events for i3 Verticals?
The i3 Verticals company history is a narrative of strategic expansion and focused development, beginning with its founding in 2012. The company has consistently evolved through key acquisitions and divestitures, shaping its trajectory as a specialized software provider.
| Year | Key Event |
|---|---|
| 2012 | i3 Verticals was founded in Nashville, Tennessee, by Greg Daily with a focus on integrated payment and software solutions. |
| 2016 | The company expanded its service offerings by acquiring Esber Cash Register and Bill & Pay in April, followed by Axia Payments in June to bolster payment processing. |
| 2017 | Randall Data Systems was acquired in February, further strengthening the company's capabilities. |
| 2018 | i3 Verticals completed its Initial Public Offering (IPO) on Nasdaq under the ticker symbol IIIV, raising approximately $60 million. |
| 2019 | A series of acquisitions took place, including iGov Solutions, NET Data Corporation, and GHS Collection in March-April, and Pace Payment for $52.7 million in June. |
| 2020 | The company acquired mobileAxept in July and three additional companies in October to enhance its Public Sector and Healthcare verticals. |
| 2023 | AccuFund was acquired in January, adding to the company's portfolio. |
| 2024 | i3 Verticals completed the sale of its Merchant Services business to Payroc for $438 million on September 20, and reported its Fourth Quarter and Full Fiscal Year 2024 financial results on November 25. |
| 2025 | The company reported Q1 Fiscal 2025 financial results on February 6, showing revenue from continuing operations increased by 12.1% to $61.7 million. In April, a utility billing software company was acquired for $9.0 million, and on May 5, the Healthcare Revenue Cycle Management (RCM) business was sold to Infinx for $96 million. Q3 Fiscal 2025 results reported on August 7 indicated revenue from continuing operations increased 12.4% to $51.9 million, with SaaS revenue up 24%. |
Strategic Focus on Public Sector Software
Following significant divestitures, i3 Verticals is now a pure-play provider focused on the public sector. Its strategy centers on key verticals such as transportation, public administration, and K-12 education.
Financial Projections and Growth Drivers
For fiscal year 2025, the company projects revenue from continuing operations between $207 million and $217 million. Management anticipates high single-digit organic revenue growth and annual EBITDA margin improvements of 50 to 100 basis points.
Leveraging Technology and Market Opportunities
The company plans to utilize AI technologies to enhance its market penetration and pursue acquisitions that align with public sector digital transformation trends. The global government software market is expected to exceed $77 billion by 2031, presenting substantial growth potential.
Financial Strength and Strategic Vision
With a strong balance sheet, including over $50 million in cash and a $400 million revolving credit facility as of Q3 2025, i3 Verticals is positioned for strategic initiatives. CEO Greg Daily described 2025 as a year of 'new beginnings,' underscoring the company's renewed focus on its core mission. This strategic shift reflects the company's Mission, Vision & Core Values of i3 Verticals.
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