A decade in the past, SumUp was one of many military of fintechs that made names for themselves with dongles that turned primary smartphones into card cost terminals. As we speak, the London-based firm has expanded right into a wider vary of enterprise providers which might be utilized by some 4 million small and medium companies in 35 markets, and because it continues to scale out its ambitions, it’s closed in on a significant spherical of funding of €590 million ($624 million).
The cash will probably be used for acquisitions, extra hiring (it now employs some 3,000 folks), and extra natural product growth, the corporate mentioned.
The funding — led by Bain Capital Tech Alternatives, with participation additionally from funds managed by BlackRock, btov Companions, Centerbridge, Crestline, Fin Capital, and Sentinel Dome Companions, and others — is coming within the type of 50% fairness and 50% debt and values SumUp at €8 billion ($8.5 billion).
SumUp has raised some €1.5 billion during the last ten years, however most of that has been in debt (together with a €750 million debt spherical final yr).
Marc-Alexander Christ, SumUp co-founder and CFO, mentioned in an interview that in actual fact earlier than this spherical lower than €100 million of that determine was fairness, that means dilution is comparatively low regardless of these excessive numbers, and there was little in the way in which of transparency on the corporate’s valuation.
Covid-19 put a dampener on loads of in-person commerce, and that had a knock-on impact not simply on retailers however the folks and firms that labored of their commerce ecosystems. The answer for a corporation like SumUp — with the bread and butter of its enterprise, level of sale funds, essentially part of that in-person commerce expertise — has been to diversify and double down on a wider array of providers for its small enterprise retailers prospects.
To that finish, it has used vital chunks of the debt it’s raised up to now for acquisitions and to construct out extra providers past POS funds, in areas like enterprise banking (the fundamental model of which it throws in as a freebie), on-line funds and enterprise providers round each.
That is half and parcel of how the area has developed. At a time when others in the identical enterprise as SumUp have both diversified strongly into areas like cryptocurrency (with the unique participant right here, Sq., going as far as to rebrand as Block), or been snapped up by even greater fish (see: PayPal buying iZettle), SumUp has positioned itself because the SMB fintech consolidator.
In what’s a really fragmented area, it has snapped up firms to enhance and broaden its funds platform reminiscent of Payleven (a “Sq. clone” that was hatched at Rocket Web), Goodtill, Tiller, and U.S.-based buyer loyalty startup Fivestars. And when you think about all the parts that go into shopping for and promoting items and providers, there are loads of areas left for SumUp to deal with — large information analytics, extra instruments to construct, handle and optimise, on-line gross sales experiences for its prospects, extra expertise to make use of to enhance how gadgets are offered in bodily commerce experiences, and so forth — all areas that SumUp can method both by means of constructing its personal expertise, or certainly by means of extra M&A.
It’s a technique that has labored, it appears: altogether, SumUp’s revenues have grown 60% yearly within the final couple of years, Christ mentioned. And with some 10% of its 4 million companies now utilizing its enterprise banking service, he added that this probably makes SumUp “the world’s largest neobank for SMBs”.
However, turning that statistic round, POS funds nonetheless represents the majority of the corporate’s revenues, so 60% development isn’t just a testomony to SumUp having the ability to develop that enterprise within the final two years, but in addition the truth that in-person and point-of-sale funds remained energetic areas for transactions.
And the identical may very well be mentioned for the corporate’s international technique. Though SumUp notes that it’s now in 35 markets and driving into extra rising international locations — its most up-to-date launch was in Peru — its dwelling market of Europe stays its largest geography in the intervening time. “The powerhouse clearly is Europe, with EMEA nonetheless the driving drive for brand new income,” mentioned Michael Schrezenmaier, the corporate’s CEO for the area.
“SumUp has regularly developed to empower a rising and various area of small companies with cost options and instruments to effectively join with their on a regular basis shoppers,” Darren Abrahamson, an MD at Bain Capital Tech Alternatives, in an announcement. “SumUp’s management crew have led the corporate to sustained and accelerated development by means of growth to greater than 30 international locations the place they’ve had a direct and constructive influence on the small enterprise ecosystem. We’re proud to contribute our deep fintech and funds expertise to assist SumUp’s exceptional capacity to push the boundaries and lead an extremely aggressive trade.”