European point of sale provider SumUp acquires customer loyalty startup Fivestars for $317M

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Measure, a European-based competitor to Square, PayPal/iZettle and others that provides mobile-powered card readers and other sales technology to merchants and small businesses, set out to dig deeper into that market and expand the types. Made an acquisition in the US. of services that it provides to customers globally.

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The company has acquired five stars, which provides loyalty, marketing, payments and other services to small merchants used by approximately 70 million consumers and 12,000 businesses in the US. London-based SumUp said it would pay $317 million in a combination of cash and stock to the San Francisco startup.

This is a jump on the startup’s valuation as a private company. According to pitch book, FiveStars — which was originally incubated at Y Combinator and later backed by VCs that included Salt Partners, Lightspeed, DCM Ventures, Menlo Ventures and Harbourwest Partners — was valued at $285 million post-money when it A Series D of $52.5 million was raised. years ago, in October 2020.

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It’s unclear why FiveStar sold out, nor was it actively approached or looking for buyers, but you can’t help but wonder what kind of impact it had over the past year and a half, where a lot Everyone turned away from shopping because of the pandemic, the person was on company business – which is largely based on personal transactions.

On a more positive note, SumUp buying FiveStars now shows how it will now double the opportunity going forward when people and traders alike. Huh Getting back to the bottom of physical shopping.

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SumUp debuted in 2012 as one of several Square clones rolling out of Europe, when the US company had yet to expand outside its home market. Since then it has diversified into online payments, invoicing and other services needed by merchants and other small businesses. And it has increased. Today, the company has more than 3 million merchant users in 34 markets, a scale that helped it raise nearly $900 million in debt earlier this year to fuel further expansion.

That funding has been used to move into new areas as well as continue to build out SumUp’s platform and footprint in existing markets.

Although SumUp has been active in the US in theory for a few years, it has a modest presence in the country, acknowledged Andrew Helms, SumUp’s managing director in the country. So this acquisition – SumUp’s first in the country – will be used to create deeper penetration in that market.

Fivestars is a popular product, and SumUp hopes to leverage that existing business, which Fivestars says, to grow its relationships with merchants, specifically signing up for SumUp’s own card readers. To date, over $3 billion in sales and 100 million transactions per year. Other sales technology. Helms confirmed that the plan will be to maintain FiveStar’s branding for now and work on integrating its product more closely into SumUp’s platform.

Victor Ho, co-founder and CEO of FiveStars, will stay with the rest of the company’s SF-based team.

“We founded FiveStar to give small businesses the opportunity to thrive in the digital economy, and over the years we have achieved just that,” Ho said in a statement. “Understanding that SumUp shares this mission, it was an easy decision to partner, and together, we look forward to supporting a retail market that champions small business success.”

Getting FiveStars also means a lot in the context of SumUp’s growth. Part of its strategy has always been to pursue inorganic expansion, and over the years, including a merger with Peleven, another Square clone originally incubated by Berlin’s Rocket Internet; And buying and integrating Shoplo to give its merchants the ability to sell online across multiple marketplaces.

In particular, SumUp has not had a loyalty product before, so there will likely be opportunities to bring FiveStar’s technology to other markets outside the US for the first time, such as in Europe and Latin America, where SumUp is already active.

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