SumUp defies fintech funding slump with $307 million fundraise

British funds startup SumUp, recognized for its small card readers, on Monday introduced it has raised 285 million euros ($306.6 million) in a bumper spherical of funding that values the corporate north of $8.6 billion.

Sixth Avenue Progress, the expansion arm of world funding agency Sixth Avenue, led the funding in SumUp, whereas current current investor Bain Capital Tech Alternatives, fintech funding agency Fin Capital, and debt financing agency Liquidity Group, participated in SumUp’s newest spherical as nicely. The spherical predominantly consisted of fairness, although a small portion of the funds was raised as debt.

SumUp Chief Monetary Officer Hermione McKee mentioned the contemporary capital offers the corporate “extra firepower to behave on alternatives that we see arising over the course of the subsequent two years.”

“If we take into consideration our geographical growth, in August we launched Australia as our thirty sixth market globally,” McKee informed CNBC in an interview final week forward of the information.

“We’ve this foothold in Latin America and there is extra growth that may be performed there. Then we take a look at Asia, how can we take into consideration that area, after which clearly alternatives throughout Africa. There’s so many alternatives globally. We’re consistently assessing this ‘purchase versus construct’ technique.”

With this spherical, the corporate says it “continues to construct additional” on the valuation it attained in the summertime of 2022, when SumUp was final valued at 8 billion euros ($8.6 billion) in a 2022 funding spherical that noticed the agency increase a whopping 590 million euros of capital for progress and world growth. A SumUp spokesperson confirmed the deal is an up spherical, that means its valuation is increased than it was beforehand.

That is no small achievement given the state of European expertise valuations, which have taken a hammering over the previous 12 months as buyers flee from tech because of increased rates of interest and macroeconomic headwinds.

In line with enterprise knowledge agency PitchBook, median valuations declined within the third quarter throughout all phases in comparison with 2022, with late-stage valuations displaying probably the most resilience and growth-stage the least.

Earlier this 12 months, current shareholders in SumUp bought stakes within the agency at a closely discounted value to its final official valuation. One, on-line coupons website Groupon, disclosed in a submitting with the U.S. Securities and Trade Fee that it was promoting off shares in SumUp at a value that may worth the corporate at simply 3.9 billion euros ($4.2 billion).

SumUp, which competes primarily with Jack Dorsey’s funds enterprise Block, previously often called Sq., in addition to PayPal’s iZettle, FIS’ WorldPay, Stripe, and Adyen, has been increasing into new traces of enterprise currently, not least lending. The corporate launched a service that allows service provider to use for a money advance or enterprise loans as much as a sure restrict based mostly on their card gross sales revenues.

SumUp secured a $100 million credit score facility from Victory Park Capital this summer season to bolster its money advance providing. McKee mentioned that the lending product has been going nicely thus far, with the overwhelming majority of its retailers paying again in a well timed method.

“We’re seeing fast returns on that capital, and retailers which might be genuinely supporting their progress. After which they’re in a position to repay that again in a short while intervals for the transaction quantity that we see,” McKee mentioned.

“We’ve not seen any actual pullback when it comes to compensation knowledge over the course of the final six months,” she added. “Our fashions are consistently iterating to guarantee that that these elements we’re observing do not develop into stale.”

SumUp additionally launched new point-of-sale choices, together with self-service kiosks that allow prospects order in shops utilizing a touchscreen interface.

SumUp just lately launched Apple’s Faucet to Pay characteristic within the U.Okay. and the Netherlands, which permits folks to faucet their card or cellphone on a vendor’s iPhone utilizing a smartphone app. It is also been upgrading its current point-of-sale techniques, with its POS Lite and POS Professionals countertop techniques that may be paired with SumUp’s card readers.

Going ahead, SumUp plans to discover extra merger and acquisition alternatives to assist it drive its growth overseas.

“M&A is all the time one thing that is on the desk,” McKee mentioned. “We’ve expanded into new geographies prior to now with M&A. That is one thing we’re all the time assessing. We’ve expertise in each constructing an ecosystem in addition to shopping for. And each of these items can be found to us, clearly, sure, this simply offers us better optionality and the flexibility to maneuver rapidly, ought to we see the correct alternative come up.”

SumUp has no fast plans to go public, McKee added, because it has ample entry to capital within the personal markets.

“I believe it is confirmed by this spherical that we even have entry to non-public swimming pools of capital, so we need not IPO,” she mentioned.

“We’re consistently bettering processes, really ensuring that we’re working at an ordinary and high quality that’s applicable for public markets. However on the identical time, this isn’t one thing that, you already know, is imminent, and across the nook that we’re actively planning for at the moment.”