SumUp is raising $624 million at an $8.5 billion valuation, and its payments and business technology is now used by 4 million SMBs.

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Ten years ago, Summarizing was one of those fintech companies that made a name for themselves with dongles that turned ordinary smartphones into payment terminals. Today, the London-based company has expanded into a broader range of business services used by some 4 million SMEs across 35 markets, and as it continues to expand its ambition it is approaching a major funding round. 590 million euros (624 million dollars).

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The money will be used for acquisitions, additional hiring (the company now employs about 3,000 people) and more organic product development, the company said.

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The investment, led by Bain Capital Tech Opportunities, also involving funds managed by BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital, Sentinel Dome Partners and others, is 50% equity and 50% debt. and values ​​SumUp at 8 billion euros ($8.5 billion).

SumUp has raised around €1.5bn over the past ten years, but most of that is debt (including a €750m debt round last year).

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Marc-Alexandre Christ, co-founder and CFO of SumUp, said in an interview that prior to this round, less than €100 million of that amount was actually equity, meaning dilution is relatively low despite these high numbers, and in the way of company valuation transparency.

Covid-19 has put a brake on much face-to-face commerce, and this has had a domino effect not only on retailers, but also on the people and companies that operate in their merchandising ecosystems. The solution for a company like SumUp—with the bread and butter of its business, point-of-sale payments a fundamental part of that personal commerce experience—was to diversify and double its broader range of services for its small business. retail customers.

To that end, it has used a significant portion of the debt it has raised to date to acquire and create value-added services beyond POS payments in areas such as business banking (the basic version of which is free), online payments, and business services around both.

This is an integral part of the evolution of space. At a time when other companies in the same business as SumUp have either diversified heavily into areas like cryptocurrency (the original player here, Square, went so far as to rebrand it as Block) or were swallowed up by even bigger fish (See: PayPal Acquisition of iZettle), SumUp positions itself as a fintech consolidator for SMBs.

In a very fragmented space, the company has bought up companies to complement and expand its payment platform, such as payeven (“Square clone” hatched on Rocket Internet), Goodtill, Tiller and US-based customer loyalty startup Fivestars. And when you consider all the elements involved in buying and selling goods and services, SumUp has a lot of areas to tackle – big data analytics, additional tools to create, manage and optimize, the online sales experience for its customers, more technologies that can be used to improve how goods are sold in a physical trading environment, and so on—all areas that SumUp can get closer to, either by building its own technology or through more mergers and acquisitions.

That strategy appears to have worked: Overall, SumUp’s revenue has grown by 60% annually over the past couple of years, Crist said. He added that about 10% of the 4 million businesses currently use his business banking services, potentially making SumUp “the world’s largest neobank for SMEs.”

However, turning that statistic around, POS payments still make up the bulk of the company’s revenue, so the 60% growth is not only a testament to the fact that SumUp has been able to expand this business over the past two years, but also to the fact that personal and POS payments remained active areas for transactions.

The same can be said about the company’s global strategy. While SumUp notes that it currently has a presence in 35 markets and is expanding into other developing countries – its most recent launch was in Peru – its home market in Europe remains its largest geographic footprint at the moment. “Obviously Europe is the driver and EMEA is still the driver of new revenue,” said Michael Schresenmeier, CEO for the region.

“SumUp has continually evolved to provide the growing and diverse small business landscape with payment solutions and tools to effectively connect with their everyday consumers,” Darren Abrahamson, managing director of Bain Capital Tech Opportunities, said in a statement. “SumUp’s leadership team has led the company to sustainable and accelerated growth through expansion into over 30 countries where they have had a direct and positive impact on the small business ecosystem. We are proud to be able to bring our deep expertise in fintech and payments to help SumUp push the boundaries and become a leader in an incredibly competitive industry.”


Credit: techcrunch.com /

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