SumUp raises $ 624 million with an estimated $ 8.5 billion, and its payments and business technologies are now used by 4 million small and medium-sized businesses – TechCrunch

A decade ago, SumUp was one of an army of fintech companies that made names with dongles that turned major smartphones into card payment terminals. Today, the London-based company has expanded into a wider range of business services used by around 4 million SMEs in 35 markets, and as it continues to expand its ambitions, it has closed in on a wide range of 590 million ($ 624 million).

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

The investment – led by Bain Capital Tech Opportunities, with the participation of funds managed by BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital and Sentinel Dome Partners and others – comes in the form of 50% equity and 50% debt and is valued by SumUp at 8 billion euros ($ 8.5 billion).

SumUp has raised about 1.5 billion euros in the last ten years, but most of it is in debt (including a debt of 750 million euros last year).

Mark-Alexander Christ, co-founder and CFO of SumUp, said in an interview that in fact before this round less than 100 million euros of this figure were equity, which means that dilution is relatively low despite these high numbers and is there was little in the way of transparency in the company’s valuation.

Covid-19 hinders much of personal trade, and this has had an impact not only on retailers but also on the people and companies that operate in their commercial ecosystems. The solution for a company like SumUp – with the bread and butter of its business, on-site payments, a major part of this personal trading experience – is to diversify and double the wider range of services for its small business retailers.

To this end, he has used significant portions of the debt he has accumulated so far to acquire and build more services outside of POS payments, in areas such as business banking (the basic version he throws away for free), online payments and business services around both. .

This is an integral part of how space has evolved. At a time when others in the same business as SumUp were either diversifying heavily into areas such as cryptocurrency (with the original player here, Square, going as far as rebranding as Block), or being grabbed by even bigger fish (see: PayPal acquisition of iZettle), SumUp is positioned as an SMB fintech consolidator.

In what is a highly fragmented space, he grabbed companies to complement and expand his payment platform such as Payleven (Clown Square, which was hatched on Rocket Internet), Goodtill, Tiller and the US-based loyalty startup. to Fivestars customers. And when you consider all the elements involved in buying and selling goods and services, there are still many areas that SumUp has to deal with – big data analysis, more tools to build, manage and optimize, online sales experience for its customers, more technology to use to improve the way items are sold in physical commerce, etc. – all areas that SumUp can approach either by building its own technology or really through more M&A.

This seems to be a strategy that works: overall, SumUp’s revenue has grown by 60% annually over the past few years, Christ said. And with about 10 percent of its 4 million businesses now using its business banking services, he added that this potentially makes SumUp “the world’s largest non-bank for small and medium-sized businesses.”

However, looking at these statistics, POS payments still account for the majority of the company’s revenue, so 60% growth is not only proof that SumUp can grow this business in the last two years, but also and the fact that in-person and on-site payments remain active areas for transactions.

The same can be said for the company’s global strategy. Although SumUp notes that it now has 35 markets and is entering more developing countries – most recently in Peru – its domestic market in Europe remains its largest geography at the moment. “The power hub is clearly Europe, and the EMEA is still the driving force for new revenue,” said Michael Schresenmeier, the company’s chief executive officer for the region.

“SumUp is constantly evolving to enable a growing and diverse area of ​​small business with payment solutions and tools to effectively connect with its daily customers,” said Darren Abrahamson, MD, Bain Capital Tech Opportunities. “SumUp’s leadership team has led the company to sustainable and accelerated growth through expansion in more than 30 countries, where they have had a direct and positive impact on the small business ecosystem. We are proud to contribute our extensive experience in fintech technology and payments to support SumUp’s remarkable ability to push the boundaries and lead an incredibly competitive industry. “

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