i3 Verticals, Inc. (i3 Verticals) builds, acquires and grows software solutions in the public sector and healthcare vertical markets.
The company’s broad array of enterprise solutions deeply integrate within customers’ operations, which leads to long-term partnerships.
Sale of Merchant Services Business
On September 20, 2024, i3 Verticals, LLC, and i3 Holdings Sub, Inc., a wholly-owned subsidiary of i3 Verticals, LLC (‘Corporation Seller,’ and collectively with i3 Verticals, LLC, the ‘Sellers...
i3 Verticals, Inc. (i3 Verticals) builds, acquires and grows software solutions in the public sector and healthcare vertical markets.
The company’s broad array of enterprise solutions deeply integrate within customers’ operations, which leads to long-term partnerships.
Sale of Merchant Services Business
On September 20, 2024, i3 Verticals, LLC, and i3 Holdings Sub, Inc., a wholly-owned subsidiary of i3 Verticals, LLC (‘Corporation Seller,’ and collectively with i3 Verticals, LLC, the ‘Sellers’) completed the transactions (such closing, the ‘Closing’) contemplated by that certain Securities Purchase Agreement dated as of June 26, 2024 (the ‘Purchase Agreement’), by and among i3 Verticals, LLC, Corporation Seller, the company (solely for the purpose of providing a guaranty of the obligations of Sellers as set forth in the Purchase Agreement), Payroc Buyer, LLC (‘Buyer’), and Payroc WorldAccess, LLC (solely for the purpose of providing a guaranty of the obligations of Buyer as set forth in the Purchase Agreement). Pursuant to the terms of the Purchase Agreement, the Sellers sold to Buyer the equity interests of certain direct and indirect wholly-owned subsidiaries of Sellers (the ‘Acquired Entities’) primarily comprising the company’s merchant services business, including its associated proprietary technology (the ‘Merchant Services Business’), after giving effect to the contribution of certain assets and the assignment of certain liabilities associated with the Merchant Services Business from i3 Verticals, LLC and certain affiliates to the Acquired Entities pursuant to a contribution agreement which was entered into immediately prior to the Closing.
Segments
Public Sector
The company has products and solutions that create an efficient flow of information throughout a variety of public sector entities. The company serves customers at both the state and local level and the company’s geographic reach covers most of the United States and some of Canada. The company’s solutions help its customers provide more responsive and efficient services to their citizens and stakeholders.
There are five sub-verticals within the Public Sector vertical:
JusticeTech and Public Safety: Product categories include (1) fully integrated digital solutions offering dynamic processes to plan, coordinate, evaluate, record, and provide up to date information within court systems, (2) E-Filing and revenue cycle management solutions for courts, and (4) Solutions for computer aided dispatch, law records management, evidence management, jail management, mobile solutions, and livescan.
Transportation: Products include comprehensive solutions for driver license, vehicle title and registration and motor carrier compliance for departments of transportation in the United States and Canada.
Utilities: Product categories include (1) digital customer engagement platform, including web, mobile, chat, and voice options, enables intuitive self-service options for customers to manage their data and accounts, and (2) complete suite of billing and back-office management software solutions and services to enhance enterprise applications, improve customer experience, and increase efficiency of utility operations.
Enterprise Resource Planning (‘ERP’): Product categories include (1) solutions that connect the organization and its data to create a flow of information providing insight across multiple departments, (2) digital land records solutions that boost proficiency and maintain records to enable submission of index information, scanning of document images and secure instantaneous retrieval of information, (3) licensing and permitting solutions that automate every step of the application, renewal and payment process, and (4) digital solutions designed for appraisal information, tax collection management, revenue collection, and Computer Assisted Mass Appraisal.
Education: Products include (1) comprehensive solutions for school lunch programs, including meal account management, point of sale, menu planning, nutritional analysis, food inventory and free and reduced meal applications and (2) school event solutions, including ticketing and concessions.
The company delivers integrated payments with its proprietary payment facilitator platform throughout many of these products. These solutions allow the company’s customers to efficiently process court, tax, registration, utility, school and other payments.
Healthcare
The company’s Healthcare segment is dedicated to delivering integrated solutions across the healthcare ecosystem, catering to providers and payers, with a strong emphasis on enhancing process efficiency and ensuring compliance.
There are two sub-verticals within the Healthcare vertical:
Provider Software Solutions: Products include the company’s versatile care delivery platform, which encompasses a range of solutions, including EHR, practice management tools, patient engagement applications, and patient payment solutions. These solutions are designed to adapt to the diverse needs of healthcare organizations, from small physician practices to large academic medical institutions and multi-location health systems. By providing flexible and scalable technology solutions, the company empowers its clients to navigate the evolving landscape of healthcare. Complementing the company’s technology platform, the company offers a comprehensive portfolio of revenue cycle management services. These services provide the company’s clients with a full end-to-end experience, covering all aspects of their financial operations. From revenue optimization and billing to claims processing and coding, the company’s services are designed to streamline financial processes and maximize revenue performance for healthcare organizations.
Payer Software Solutions: Products include (1) tailored solutions for managing compliance requirements, including appeals & grievances and (2) the company’s network management platform assists payers in provider contracting, credentialing, and outreach, enabling them to expand and adapt to changing market dynamics.
Technology
The company is committed to agile delivery, scalable platforms, and secure solutions, intended to bring the company’s customers the best possible mission critical software. The company’s team of highly skilled and experienced technologists is dedicated to implementing software products that cater to the diverse and evolving needs of the company’s customers. The company continuously refines and expands its software offerings to stay aligned with the latest industry and current market trends.
Agile Development
The company’s flexible approach to digital delivery is centered around agility. The company prioritizes rapid development, continuous improvement, and dynamic responsiveness in the company’s ever-changing environment. This means the company’s customers receive software solutions that evolve with their needs as well as the market. The company’s product management life cycle ensures the company’s products remain robust and flexible. Product roadmaps drive the company’s investments.
The company’s development is supported by streamlined back office technology to increase efficiency. This includes consolidated instant messaging, file sharing, and telephony solutions. The company has reduced dependency on multiple vendors across the enterprise while creating efficiency and reducing expense. Together, these initiatives support the company’s commitment to operational efficiency and exceptional service delivery.
Scalable Platforms
The company understands that scalability is critical to meeting the growing demands of the digital landscape. The company’s cloud-first strategy drives solutions that are designed to expand seamlessly, empowering the company’s systems to adapt, grow, and thrive without constraints. New development is always cloud-native SaaS solutions.
The company is a scaled partner of both Amazon Web Services (‘AWS’) and Microsoft Azure (‘Azure’) cloud services. The company’s AWS cloud consolidation initiative is nearing successful completion, with collocated and on-premises data centers successfully migrated to the cloud and unifying disparate subscriptions into an enterprise account. The company’s strategic partnerships with multiple cloud providers give the company flexibility, as well as capabilities beyond that of many of the company’s competitors.
Secure Solutions
Further strengthening the company’s technology infrastructure, the company has centralized cybersecurity measures using fully integrated Microsoft tools, including endpoint detection and response, mobile device management, and identity and access management solutions.
Payment Technology
In addition to the company’s broad suite of vertical market software, the company has developed a proprietary payment facilitation platform. The company has centralized the company’s payment solutions onto the company’s proprietary gateway, providing the company excellent scale and pricing with the company’s processing partner. Consolidation of the payments platform also reduces the company’s overall PCI scope and increases margins by lowering expenses. Capabilities include integration with customer business management systems; integration with EMV/contactless devices; unified reporting for the company’s customers across ACH, card, etc.; risk management; and PCI-compliant security and extensive reporting tools.
The company offers its customers a single point of access through the company’s powerful but simple proprietary core platform. From there the company offers a suite of proprietary payment and software solutions spanning brick and mortar locations, web-based and mobile-based payments.
The company’s payment technology platforms include an unified application programming interface that provides access to ACH processing and payment facilitator merchant processing capabilities. The platform APIs allow access to Europay, Mastercard and Visa (‘EMV’) devices using an implementation that shields software providers from the requirements of PCI or payment application data security standard certifications. The company also supports Paypal and Venmo payments.
Sales and Marketing
The company utilizes its direct sales team to sell the company’s proprietary software and payment technology solutions directly to customers in the company’s vertical markets. Sales teams are organized and coordinated by vertical and sub-vertical market, leading to extensive cross-selling opportunities across the company’s broad array of solutions. Leveraging the company’s vertically focused suite of products and services, the company is able to maximize the performance of the company’s employee sales force as the company continues to attract new customers.
The company’s product marketing is delivered through a shared-services model, which is coordinated with each vertical market. Marketing is tightly aligned with the company’s sales efforts by providing event coordination, demand-generation resources, physical and electronic marketing campaigns and collateral. The company’s enterprise marketing function establishes its overall corporate marketing strategy to enhance brand awareness and demand generation. The company uses a broad variety of traditional and digital marketing mediums to engage prospective customers.
Operations
The company’s operations team is uniquely structured to optimize the experience of the company’s customers. These vertically focused business support teams allow the company to establish expertise that delivers a scalable support structure and enables the company to align its services with the economic goals of the company’s company. A strong network of shared services, such as marketing, legal, finance and HR, support the company’s vertical and sub-vertical units and ensure they are focused on providing best in-class service to the company’s customers.
The company’s operations team is structured to effectively support the individual needs of the company’s customers. This includes customer onboarding; data conversions and migrations; software configurations and integrations; customer support and retention; customer training and activations; contract renewals, billing and financial review; credit underwriting and risk management; payment facilitator processing support; and end-user customer support.
The company’s technical operations team oversees the execution of development, quality control, delivery and support for the company’s vertical software solutions and proprietary payment facilitator platform. Products are developed and tested according to the software development lifecycle, composed of iterative backlog refinement, feature prioritization, development and testing with a dedicated focus on planning and execution. Releases are modeled on continuous deployment and added to the live environment on a routine basis. Each application is built with redundancy to foster resiliency and built to be easily managed during a disaster recovery scenario. The company’s hosted solutions are managed within dedicated environments within AWS and Azure that align with various compliance standards specific to each industry. This includes, but is not limited to PCI, Health Insurance Portability and Accountability Act of 1996 (‘HIPAA’) and National Institute of Standards and Technology (‘NIST’), ensuring the protection of all personal and transactional data.
Intellectual Property
The company owns a number of registered federal service marks, including without limitation, i3 Verticals, i3 Education, ImageSoft, JusticeTech, TrueSign, Milestone, and PaySchools. The company also owns a number of domain names, including without limitation, www.i3verticals.com.
Government Regulation
As an entity that provides services to educational institutions, the company is indirectly subject to the Family Educational Rights and Privacy Act (FERPA) and the privacy requirements of the Protection of Pupil Rights Amendment (PPRA). The company's business is subject to U.S. federal anti-money laundering laws and regulations, including the Bank Secrecy Act of 1970, as amended by the USA PATRIOT Act of 2001, which it refers to collectively as the BSA. The company is also subject to certain economic and trade sanctions programs that are administered by the Office of Foreign Assets Control (OFAC) that prohibit or restrict transactions to or from (or transactions dealing with) specified countries, their governments and in certain circumstances, their nationals, such as those who might be narcotics traffickers and terrorists or terrorist organizations.
The company and many of its clients are subject to Section 5 of the Federal Trade Commission Act prohibiting unfair or deceptive acts or practices. Various federal and state regulatory enforcement agencies, including the Federal Trade Commission and the states attorneys general, have authority to take action against non-banks that engage in unfair or deceptive acts or practices or violate other laws, rules and regulations and to the extent the company is processing payments or providing services.
Certain of the company's distribution partners are financial institutions that are directly subject to various regulations and compliance obligations issued by the Consumer Financial Protection Bureau (the CFPB), the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the National Credit Union Administration and other agencies responsible for regulating financial institutions, which includes state financial institution regulators.
The company is also subject to network operating rules and guidelines promulgated by the National Automated Clearing House Association (NACHA) relating to payment transactions it processes using the ACH Network. The NACHA Operating Rules and Guidelines allocate responsibility and liabilities to the various participants in the payment network, including the company and its partner financial institutions. NACHA has focused upon data security and privacy responsibilities.
The company is subject to the U.S. federal and state unclaimed or abandoned property (escheat) laws which require it to remit to certain government authorities property of others.
Competition
The company’s competitors in the vertical market software industry include, among others, Tyler Technologies, Inc., Constellation Software, Inc. Verra Mobility Corp, EverCommerce Inc., Roper Technologies, Inc., Axon Technologies, Paymentus Holdings, Inc., Flywire Corp, Weave Communications Inc., Phreesia Inc. and Waystar Holding Corp.
History
i3 Verticals, Inc. was founded in 2012. The company was incorporated as a Delaware corporation in 2018.
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