SumUp Raises $624M At $8.5B Valuation, Its Payments And Business Technology Is Now Used By 4M SMBs – Meczyki.Net

a decade ago, sum up was one of the army of fintechs that made a name for itself with dongles, which turned basic smartphones into card payment terminals. Today, the London-based company has expanded into a wide range of business services that are used by nearly 4 million small and medium businesses in 35 markets, and as it continues to grow its ambitions, it will be able to provide a slew of funding. The big round has closed for €590 million ($624 million).

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

The investment – ​​led by Bain Capital Tech Opportunities, with participation also from funds managed by BlackRock, BTOV Partners, Centerbridge, Crestline, Fin Capital, and Sentinel Dome Partners, and others – is 50% equity and 50% debt. Is. And SumUp is valued at €8 billion ($8.5 billion).

SumUp has raised some €1.5 billion over the past ten years, but most of it remains in debt (including a €750 million loan round last year).

Marc-Alexander Christ, SumUp’s co-founder and CFO, said in an interview that there was actually less than €100 million of equity in that figure prior to the round, meaning that despite those high numbers, there was less than a dilution. There is, and there is little in the way of transparency over the valuation of the company.

COVID-19 affected a lot of in-person commerce, and it not only affected retailers but the people and companies operating in their commerce ecosystem. The solution for a company like SumUp — with its business bread and butter, point of sale payments, basically a part of that personalized commerce experience — to diversify and double down on a wider range of services for its small business has been done. retail customer.

To that end, it has used a significant portion of the debt it has raised to date for acquisitions and to build out more services beyond POS payments, including business banking (the basic version of which it throws in as a freebie), Online payment and business services both around.

It’s part of how space has evolved. At a time when others in the same business as SumUp have either strongly diversified into areas such as cryptocurrency (along with the original player here, Square, is going as far as rebranding Block ), or even being snapped by the big fish (see: PayPal’s acquisition of iZettle), SumUp has established itself as an SMB fintech consolidator.

In a very fragmented space, it has broken up companies such as PayLeven (a “Square clone” that was hatched on Rocket Internet), GoodTill, Tiller and US-based customer loyalty startup FiveStar to complement and expand its payments platform. . And when you consider all of the elements that go into buying and selling goods and services, there are plenty of areas left for SumUp to tackle – big data analytics, more tools to build, manage, and optimize, your customers. For online sales experiences, more technology to use to improve how items are sold in physical commerce experiences, and so on – across all sectors SumUp either through building its own technology, or in fact I can contact through more M&A.

It’s a strategy that seems to have worked: Overall, SumUp’s revenue has grown 60% annually over the past few years, Christ said. And some 10% of its 4 million businesses are now using its commercial banking service, he said, adding that this potentially makes SumUp “the world’s largest neobank for SMBs.”

Still, turning that stats around, POS payments still represent the bulk of the company’s revenue, so the 60% increase is a testament to not only being able to grow that business over the past two years or so. , but also the fact that in-person and point-of-sale payment transactions remained active areas.

And the same can be said of the company’s global strategy. Although SumUp notes that it is now in 35 markets and operating in more emerging countries — its most recent launch was in Peru — its home market of Europe remains its largest geography at the moment. “The powerhouse is clearly Europe, with EMEA still the driving force for new revenue,” said Michael Schrezenmaier, the company’s CEO for the region.

Darren Abrahamson, MD, Bain Capital Tech Opportunities, said in a statement, “SumUp has continuously evolved to empower the growing and diverse sector of small businesses with payment solutions and tools to efficiently connect with their everyday consumers. ” “SumUp’s leadership team has driven the company to sustained and accelerated growth through expansion in more than 30 countries, where they have had a direct and positive impact on the small business ecosystem. Pushing boundaries and being incredibly competitive We are proud to contribute our in-depth fintech and payments experience to support SumUp’s remarkable ability to lead the industry.”