Sum up — the fintech that provides payments and related services to around 4 million small businesses in Europe, America and Australia — has received some growth funding to navigate the choppy waters of the current fintech market, waters that have rocked and swayed SumUp itself .
The startup, which has roots in Germany but is based in London, has raised 285 million euros (just under $307 million). It plans to use the money to continue to grow its business organically by launching more financial services — around card readers and other point-of-sale tools, offers billing, loyalty, business accounts and more. It is also eyeing more geographies beyond the 36 where it currently operates.
And it will also turn its attention to inorganic growth — that is, mergers and acquisitions. The latter is something to watch out for: we’re currently in a buyer’s market, with fintech startups facing a significantly tighter funding landscape, down 36% globally in the last quarter; according to S&P.
(Sometimes an M&A deal can check a few strategic boxes: when SumUp acquired loyalty startup Fivestars in 2021, that gave it a boost in the US and also introduced new services to the platform.)
Sixth Street Growth is leading this latest round, with previous backers Bain Capital Tech Opportunities, Fin Capital and Liquidity Group also participating. SumUp has now raised about $1.5 billion, per PitchBook data.
Hermione McKee, who was appointed as SumUp’s CFO earlier this year, described the round as “predominantly equity” but declined to provide more specifics. He also declined to give a specific valuation for SumUp, other than to say it is higher than the $8.5 billion that SumUp reached in 2022 when it raised 590 million euros (half in equity, half in debt).
The company says it is “EBITDA positive from Q4 2022” (note: this is not the same as profitable). And that it had over 30 percent “superior growth” year over year.
But on the other hand, there are other signs that business is tough right now. SumUp says its customer base currently stands at about 4 million, which is exactly the same amount it reported two years ago.
And today’s funding news comes on the heels of some other tough data points for the company. Just a few months ago Groupon revealed that, as part of a larger group of secondary transactions among existing shareholders, it sold part of its stake in the company at a valuation of $4.1 billion. In other words, he made the sale for less than half of what the company was worth in 2022.
That $8.5 billion valuation by 2022, meanwhile, was a significant discount to the €20 billion ($21.5 billion) SumUp had hoped to achieve, underscoring how difficult it has been to raise large equity rounds. (And according to that, SumUp’s last increase, in August, was for one $100 million credit facility.)
Payment technology businesses in Europe and the US have also faced tougher scrutiny and slower business.
PayPal and Square, two publicly traded U.S. companies that compete directly with SumUp, have seen their share prices and market capitalization rise since 2022. (PayPal’s share price is currently less than $60/ a share, from a peak of nearly $300/share.Square and parent Block trade at about 25% of their peak.) Stripe saw its valuation nearly halve to $50 billion this year.
Closer to home, publicly traded Adyen is also in a financial slump after reporting sluggish growth. But as a measure of how volatile the market is right now, and how hungry investors are for any signs of good news, Adyen’s simple statement of a turnaround plan (plan, not results) sent the company’s stock up to 30%.
Klarna and Checkout haven’t been so lucky so far: Klarna’s valuation fell by around 85% the last time it raised money. Checkout was valued at $40 billion when it raised $1 billion in January 2022, but has since reportedly downgraded that to 10 billion dollars internally.
Now 11 years old and one of the largest of the private payments startups, SumUp leverages its track record of longevity as a sign of its stability.
“For over a decade, SumUp has consistently delivered solid growth and boldly entered and driven entirely new product categories and markets,” said Nari Ansari, MD at Sixth Street Growth in a statement. “This … track record and culture of innovation combined with SumUp’s thoughtful approach to growth and efficiency are well aligned with Sixth Street Growth’s investment strategy.”
