Measure, A London-based startup that helps businesses generate electricity revenue through card payments – through physical readers, online payments and invoices – is powering itself on a large scale. Today he announced a sum of € 750 million (approximately $ 895 million at today’s rates), money he would use to continue expanding his business – specifically for acquisitions; To launch in new markets in Europe, Latin America and Asia; And building a suite of services provided to businesses. The company is already active in 33 countries (most recently Chile, Colombia and Romania) and has some 3 million businesses as customers.
The funding is coming from funds managed by Goldman Sachs, Temasek, Bain Capital Credit, Crestline and Axtree Capital Management. SumUp confirmed that the financing is coming in the form of debt, not equity, so the company has no formal valuation to disclose. To date, it is one of the largest finances, loans or otherwise for any startup in the region (ie, any privately-backed tech company).
In particular, Goldman Sachs and Bain Capital led the $ 371 million loan for the company 2019.
One of the co-founders of SumUp, Mark-Alexander Christ (does not use formal titles like the company “CEO”), said the company opted for debt on equity because it could.
“We have very stable cash flow, which allows us to take out debt,” he said in an interview. Debt is often a route taken by large, large-scale companies, especially those that generate a lot of cash. Any dilution also means that the cost of capital is low.
The company got its start in 2012 as one of the so-called waves Square “Clone” – Their service around the small card payment dongle being set up in the US and mostly outside the US is linked to phones or tablets and targeted businesses that were either not yet accepting card payments because they were too expensive or complicated. Were, or using expensive traditional alternatives. From banks.
With Square, iZettle (eventually acquired by PayPal) and many others in the space, over time SumUp has diversified into a range of other cards — and business-related payment services including online transactions, invoices, gift cards, and comprehensive point-of-sale. Solution.
It has also emerged as a consolidator in space: in 2016 it Acquired one of its big competitors, The rocket Internet-backed Pelven, which helped expand its footprint to a wider set of markets. Over the years, it has chosen a number of other startups, most recently business-centric mobile banking platforms in Lithuania, as well as several other startups to expand sales to larger locations such as Goodtill and Tiller.
Those deals also reveal how SumUp is approaching its product expansion strategy. The company’s business model is primarily dedicated to cutting down on transactions made on its platform, and so now, its strategy is about more services for businesses and measuring transaction rates, for consumers. There is no move in more financial services.
This is in contrast to companies such as Square, which have chosen more than 7 million consumer customers through Square Cash; Or iZettle, which never launched services directly to consumers, but was acquired by PayPal, one of the largest consumer-facing digital wallet companies.
And neither is SumUp interested in cryptocurrency, another area where the other two are active.
“Square has one of the easiest onboarding experiences to invest bitcoin,” Christ said. “But it is primarily a customer acquisition tool. They make some money on bitcoin but not a lot. So I don’t think we’ll get to that place soon because it doesn’t represent value for customers. This allows users to do logging only to check their accounts, but is not doing anything else. “
That focus has not only helped the company grow rapidly at a time when more transactions are taking place online and away from cash – two major trends by the Kovid-19 epidemic, which would have forced shops to close in many countries Are, made people more disappointed. To buy in-person, and using cash to reduce the broadcasting of the community got everyone – but it also helped attract this wealth.
“We are proud to support SumUp once again and we recognize the truly impressive progress the company has made over the years. We envision doing business in some of the most economic conditions and thriving He has great appreciation for what he is doing for small businesses around the world to help, “said Tom Maghan of Bain Capital Credit in a statement.” Doubling our investment in this round , Today is a demonstration of our confidence in the company and its future. “