SumUp struggles to hit €8bn valuation as tech sell-off hits UK fintechs

SumUp struggles to hit €8bn valuation as tech sell-off hits UK fintechs

SumUp is the newest European fintech to be hit by a worldwide sell-off of tech firms after the London-based start-up raised funds that gave it a valuation of €8bn (£6.9bn), lower than half of the steered worth for the group earlier this 12 months.

SumUp, which affords cost providers to small retailers, introduced on Thursday that it had raised £590m. Nonetheless, in January it was reported that SumUp was focusing on as much as £20bn, which might have made it one of many UK’s most dear start-ups.

SumUp CEO Marc-Alexander Christ mentioned he continued the spherical regardless of the decrease score as a result of it “would give traders peace of thoughts that even throughout a black swan occasion . . . we are able to nonetheless elevate cash”.

He added that the corporate “does not essentially want the money, we’re near breakeven,” however that the extra funds present a “wet day” buffer and may very well be used to fund acquisitions as a launch valuation.

The funding spherical, the primary since 2017, when Christ mentioned the start-up was valued at just below €400 million, was led by personal fairness agency Bain Capital. BlackRock, Centrebridge and Crestline had been among the many different cash managers who invested.

SumUp is much from the one funds firm to be hit by traders targeted on among the world’s highest-rated tech firms till just lately.

It was reported final week that Swedish buy-now-pay-later firm Klarna – which was for a time Europe’s largest personal firm – is attempting to lift new cash at lower than half of its $46 billion peak.

SumUp and Klarna are affected by the sell-off of publicly traded tech firms, that are down about 25 % this 12 months. Traders had been spooked by central banks’ strikes to curb inflation, an anticipated slowdown in client spending because of the cost-of-living disaster and the conflict in Ukraine.

Christ mentioned he was really “happier” to be valued at €8 billion, noting that the worth continues to be 20 occasions greater than 5 years in the past.

“It positively makes life simpler,” he says. “I can say with a transparent conscience that the €8 billion is a real and honest valuation as a result of that’s the worth that individuals within the worst markets are asking for the corporate. I do not suppose the worth will ever be decrease.

“I wasn’t actually concerned within the $22 billion valuation. . . The market was overheated [and] There have been every kind of rumors on the time,” he mentioned. “Somebody checked out public figures and guessed what may very well be.”

Based in 2012, SumUp works with 4 million small companies worldwide, offering retailers with a enterprise account and card, in addition to billing instruments and different cost providers.

Christ mentioned whereas the enterprise is rising organically, he would think about using the brand new funding for additional acquisitions.

“On this atmosphere, we imagine that when individuals understand that cash is now not free, we’ll see good alternatives for M&A offers,” mentioned the founder.

Final 12 months, US buyer loyalty web site Fivestars purchased it for $317 million. The fintech has purchased up different point-of-sale firms, together with Jersey-headquartered UK firm Goodtill and Tiller.

It purchased Polish e-commerce firm Shoplo in 2019, which elevated its energetic customers by 1 million.

SumUp has additionally borrowed lately to fund its growth. Final 12 months it raised 750 million euros from Goldman Sachs, Temasek, Bain Capital Credit score, Crestline and Oaktree.

Christ mentioned the corporate’s present debt is simply over €1 billion.

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