SumUp — the fintech that gives funds and associated companies to some 4 million small companies in Europe, the Americas and Australia — has picked up some progress 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 companies — 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 progress — that’s, M&A. The latter is one thing to look at: 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, based on S&P.
(Typically an M&A deal may test a few strategic bins: when SumUp acquired the loyalty startup Fivestars in 2021, that gave it a leg up within the U.S. and likewise launched new companies to the platform.)
Sixth Avenue Development is main this newest spherical, with earlier backers Bain Capital Tech Alternatives, Fin Capital, and Liquidity Group additionally collaborating. SumUp has now raised round $1.5 billion, per PitchBook information.
Hermione McKee, who was appointed as SumUp’ CFO earlier this 12 months, described the spherical as “largely fairness” however declined to offer extra actual figures. She additionally declined to offer a particular valuation for SumUp, besides to say that it’s greater 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 “optimistic on an EBITDA foundation since This autumn 2022” (observe: this isn’t the identical as worthwhile). And that it has had over 30 % “prime line progress” 12 months on 12 months.
However then again, there are different indications that enterprise is hard proper now. SumUp says that its buyer base at present totals round 4 million, which is strictly the identical determine it quoted two years in the past.
And as we speak’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 current shareholders, it bought a part of its stake within the firm at a valuation of $4.1 billion. In different phrases, it made the sale at lower than half what the corporate was price 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 attain, underscoring how onerous it has been to boost massive fairness rounds. (And in step with that, SumUp’s final increase, in August, was for a $100 million credit score 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. firms that compete immediately 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 practically $300/share. Sq. and dad or mum firm Block are buying and selling at round 25% of its peak.) Stripe famously noticed its valuation practically halved to $50 billion this 12 months.
Nearer to dwelling, publicly listed Adyen has additionally been within the monetary doldrums after reporting sluggish progress. However as a measure of how unstable the market is true now, and the way thirsty traders are for any indicators of fine information, Adyen’s mere assertion of a turnaround plan (plan, not outcomes) despatched the corporate’s inventory up 30%.
Klarna and Checkout have, to date, 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 monitor file of longevity as a sign of its stability.
“For over a decade, SumUp has constantly delivered sustained progress and boldly entered and led totally new product classes and markets,” mentioned Nari Ansari, MD at Sixth Avenue Development in an announcement. “This… monitor file and tradition of innovation mixed with SumUp’s considerate strategy to progress and effectivity are well-aligned with Sixth Avenue Development’s investing technique.”
