SumUp is struggling to value 8 billion euros as technical sales hit fintech in the UK

SumUp has become the latest European fintech to hit global technology companies, after the London-based startup raised funds worth € 8 billion (£ 6.9 billion), less than half of the price tag proposed for the group earlier this year.

SumUp, which offers payment services for small merchants, said on Thursday that they had collected 590 million euros evenly distributed between debt and equity to a business value of 8 billion euros. In January, however, it was reported that SumUp had a value as high as € 20 billion, which would have made it one of the UK’s most valuable start-ups.

Marc-Alexander Christ, CEO of SumUp, said he went ahead with the round despite the lower valuation because it would give “peace of mind to investors, that even during a Black Swan event… We can still collect money”.

He added that the company “does not necessarily need the money, we are close to break-even”, but that the extra financing provided a buffer for a “rainy day” and can be used to finance acquisitions as a start-up assessment.

The financing round, the start-up’s first since 2017 when Christ said it was valued at close to € 400 million, was led by the private equity firm Bain Capital. BlackRock, Centerbridge and Crestline were among other asset managers to invest.

SumUp is far from the only payment company affected by investors who have lashed out at what until recently were some of the world’s most valued technology companies.

Last week it was reported that the Swedish “buy now, pay later” company Klarna – which for a time was Europe’s largest privately owned company – is trying to raise new money for less than half of its peak value of 46 billion dollars.

SumUp and Klarna are suffering from divestments in listed technology companies, which have fallen by around 25 per cent this year. Investors have been intimidated by actions taken by central banks to curb inflation, the expected decline in consumption spending from the cost of living crisis and the war in Ukraine.

Christ said he was actually “happier” to be valued at € 8 billion, noting that the value is still 20 times greater than five years ago.

“It definitely makes life easier,” he said. “I can very comfortably say that € 8 billion is a true and fair valuation, because it is the price people put on the company in the worst markets. I never think the price will be lower than that.

“I was not really involved in the $ 22 billion valuation. . . the market was overheated [and] there were all kinds of rumors at the time, he said. “Someone looked at public figures and guessed what could be.”

Founded in 2012, SumUp works with 4 million small businesses globally, providing merchants with a business account and card, as well as billing tools and other payment services.

Christ said that although the business is growing organically, he would consider using the new financing for further acquisitions.

“In this environment, we believe we will see good opportunities for M&A deals when people realize that money is no longer free,” said the founder.

Last year, the American customer loyalty site bought Fivestars, for 317 million dollars. Fintech has snapped up other outlets, including the British company Goodtill and Tiller, which is headquartered in Jersey.

It bought the Polish e-commerce company Shoplo in 2019, which increased its active users by 1 million.

SumUp has also raised debt in recent years to help finance the expansion. Last year, it raised € 750 million from Goldman Sachs, Temasek, Bain Capital Credit, Crestline and Oaktree.

Christ said the company’s current debt amounts to just over 1 billion euros.