SumUp — the fintech that gives funds and associated providers to some 4 million small companies in Europe, the Americas and Australia — has picked up some development funding to navigate the uneven waters of the present fintech market, waters which have tipped and swayed SumUp itself.
The startup, which has roots in Germany however is predicated in London, has raised €285 million (slightly below $307 million). It plans to make use of the cash to proceed rising its enterprise organically launching extra monetary providers — across the card readers and different point-of-sale instruments, it affords invoicing, loyalty, enterprise accounts and extra. It’s additionally eyeing up extra geographies past the 36 the place it’s at present energetic.
And it’ll even be turning its consideration to inorganic development — that’s, M&A. The latter is one thing to observe: we’re at present in a purchaser’s market, with fintech startups dealing with a considerably tighter funding panorama, down by 36% globally within the final quarter, according to S&P.
(Generally an M&A deal would possibly test a few strategic containers: when SumUp acquired the loyalty startup Fivestars in 2021, that gave it a leg up within the U.S. and in addition launched new providers to the platform.)
Sixth Avenue Progress is main this newest spherical, with earlier backers Bain Capital Tech Alternatives, Fin Capital, and Liquidity Group additionally taking part. SumUp has now raised round $1.5 billion, per PitchBook data.
Hermione McKee, who was appointed as SumUp’ CFO earlier this yr, described the spherical as “mostly equity” however declined to present extra actual figures. She additionally declined to present a particular valuation for SumUp, besides to say that it’s larger than the $8.5 billion that SumUp reached in 2022 when it raised €590 million (half in fairness; half in debt).
The corporate says that it has been “positive on an EBITDA basis since Q4 2022” (be aware: this isn’t the identical as worthwhile). And that it has had over 30 % “top line growth” yr on yr.
However however, there are different indications that enterprise is hard proper now. SumUp says that its buyer base at present totals round 4 million, which is precisely the identical determine it quoted two years in the past.
And right this moment’s funding information comes within the wake of another rocky information factors for the corporate. It was solely a few months in the past that Groupon disclosed that, as half of a bigger group of secondary transactions between present shareholders, it sold part of its stake in the company at a valuation of $4.1 billion. In different phrases, it made the sale at lower than half what the corporate was value in 2022.
That $8.5 billion valuation from 2022, in the meantime, was a serious low cost on the €20 billion ($21.5 billion) SumUp had been hoping to realize, underscoring how exhausting it has been to lift large fairness rounds. (And consistent with that, SumUp’s final elevate, in August, was for a $100 million credit facility.)
Cost tech companies in Europe and the U.S. additionally confronted some powerful scrutiny and slower enterprise.
PayPal and Sq., two publicly-listed U.S. corporations that compete instantly with SumUp, have seen their share costs and market caps tank since 2022. (PayPal’s share worth is at present lower than $60/share, down from a peak of almost $300/share. Sq. and dad or mum firm Block are buying and selling at round 25% of its peak.) Stripe famously noticed its valuation almost halved to $50 billion this yr.
Nearer to house, publicly listed Adyen has additionally been within the monetary doldrums after reporting sluggish development. However as a measure of how risky the market is true now, and the way thirsty traders are for any indicators of excellent information, Adyen’s mere assertion of a turnaround plan (plan, not outcomes) despatched the corporate’s inventory up 30%.
Klarna and Checkout have, to this point, not been so fortunate: Klarna’s valuation dropped some 85% the final time it raised cash; Checkout had a $40 billion valuation when it raised $1 billion in January 2022, however since then it’s reportedly marked down that determine to $10 billion internally.
Now 11 years previous and one of many largest of the privately-held funds startups, SumUp is banking on its observe file of longevity as a sign of its stability.
“For over a decade, SumUp has consistently delivered sustained growth and boldly entered and led entirely new product categories and markets,” mentioned Nari Ansari, MD at Sixth Avenue Progress in an announcement. “This… track record and culture of innovation combined with SumUp’s thoughtful approach to growth and efficiency are well-aligned with Sixth Street Growth’s investing strategy.”
