SumUp has change into the most recent European fintech to be hit by a world sell-off in know-how corporations, after the London-based start-up raised funds giving it a valuation of €8bn (£6.9bn), lower than half the value tag instructed for the group earlier this 12 months.
SumUp, which gives funds providers for small retailers, mentioned on Thursday it had raised €590mn break up evenly between debt and fairness at an enterprise worth of €8bn. However, in January it was reported that SumUp was focusing on a price as excessive as €20bn, which might have made it one of many UK’s most dear start-ups.
Marc-Alexander Christ, chief government of SumUp, mentioned that he proceeded with the spherical regardless of the decrease valuation as a result of it could give “peace of mind to investors, that even during a black swan event . . . we can still raise money”.
He added that the corporate “doesn’t necessarily need the money, we are close to break even”, however that the additional funding offered a buffer for a “rainy day” and may very well be used to finance acquisitions as start-up valuation.
The funding spherical, the start-up’s first since 2017 when Christ mentioned it was valued at nearer to €400mn, was led by personal fairness agency Bain Capital. BlackRock, Centrebridge, and Crestline had been amongst different asset managers to take a position.
SumUp is much from the one funds firm affected by traders souring on what had been till just lately a number of the world’s most extremely valued know-how corporations.
Last week, it was reported that Swedish “buy now, pay later” enterprise Klarna — which for a time was Europe’s largest privately held firm — is making an attempt to boost new money at lower than half its peak $46bn valuation.
SumUp and Klarna are struggling from the sell-off in listed tech corporations, which have plunged about 25 per cent this 12 months. Investors have been spooked by actions taken by central banks to tame inflation, the anticipated slowdown in client spending from the cost-of-living disaster and the warfare in Ukraine.
Christ mentioned he was truly “happier” to be valued at €8bn, noting that the worth continues to be 20 occasions bigger that in contrast with 5 years in the past.
“It definitely makes life easier,” he mentioned. “I can very comfortably say the €8bn is a true and fair valuation, because that’s the price people put on the company in the worst of markets. I don’t think the price will ever be any lower than that.
“I wasn’t really involved in the $22bn valuation . . . the market was overheated [and] there were all sorts of rumours at the time,” he mentioned. “Someone looked at public numbers and guessed at what could be.”
SumUp, which was based in 2012, works with 4mn small companies globally, offering retailers with a enterprise account and card, in addition to invoicing instruments and different cost providers.
Christ mentioned though the enterprise is rising organically, he would think about using the brand new funding additional acquisitions.
“In this environment we think we will see good opportunities for M&A deals once people realise that money is not free any more,” the founder mentioned.
Last 12 months, it purchased US buyer loyalty web site Fivestars, for $317mn. The fintech has snapped up different point-of-sale companies, together with UK-based firm Goodtill and Tiller, which is headquartered in Jersey.
It purchased Polish ecommerce firm Shoplo in 2019, which boosted its energetic customers by 1mn.
SumUp has additionally raised debt over the previous few years to assist fund its growth. Last 12 months, it raised €750mn from Goldman Sachs, Temasek, Bain Capital Credit, Crestline, and Oaktree.
Christ mentioned the corporate’s present debt quantities to simply over €1bn.