US-based banking software provider Alkami Technology is planning an initial public offering (IPO) later this year at an valuation of $3bn.

According to Reuters, Alkami has chosen Goldman Sachs Group to lead the IPO.

Launched in 2007, Alkami offers a suite of cloud-based digital banking solutions to credit unions and banks. Using its software, financial firms can offer digital banking services to their users, including retail consumers and business clients.

Currently, around 160 financial institutions use Alkami’s banking software.

The company is backed by investors including General Atlantic, D1 Capital Partners and Fidelity Management and Research Company.

In September last year, Alkami raised $140m capital from private investor at an undisclosed valuation.  At that time, the company said that it has $130m annual recurring revenue.

IPO plans came at a time when the Covid-19 pandemic made digital banking necessary for financial institutions irrespective of their size.

Smaller banks with fewer resources to build digital interfaces internally are looking for third-party digital banking providers such as Alkami.