SumUp Inc., a major player in the financial technology market, today disclosed that it has raised $624 million from a group of investors led by Capital Tech Opportunities.
Half of the investment was provided in the form of equity financing, while the other half consisted of debt financing. SumUp is now valued at $8.5 billion. That figure is well below the up to $22 billion valuation the startup reportedly sought earlier this year, but still makes the London-based startup one of the most valuable financial technology companies in the U.K.
SumUp provides credit card readers that are used by nearly 4 million businesses worldwide to process customer purchases. The startup’s newest card reader, the SumUp Solo, downloads software updates automatically and supports popular digital wallet apps such as Apple Pay. The startup generates revenue by charging a 2.75% fee for every transaction processed using its devices.
SumUp has built up its installed base through a growth strategy that places a strong emphasis on acquisitions. The startup has acquired several startups, including Good Till Co. and Tiller Systems, that provide payment processing software for businesses. In parallel, SumUp has expanded to more than 30 markets worldwide to unlock new revenue opportunities.
In recent years, SumUp has broadened its growth strategy by moving into product categories beyond payment processing. As part of the effort, the startup last year launched a service that enables retailers to open business bank accounts. SumUp accounts provide access to a corporate credit card, spending management tools and other features.
Also last year, SumUp extended its focus beyond financial services by acquiring a fellow startup called Fivestars Loyalty Inc. for $317 million. Fivestars provides a cloud service that enables retailers to create digital rewards programs and encourage purchases by sending customized promotions to shoppers. At the time of the acquisition, the startup had a customer base of more than 12,000 businesses.
SumUp will use its latest funding round to make more acquisitions, TechCrunch reported today. Expanding in-house feature development efforts is another item on the agenda. The startup plans to increase its headcount to support its growth initiatives.
“SumUp has continually evolved to empower a growing and diverse field of small businesses with payment solutions and tools to efficiently connect with their everyday consumers,” said Bain Capital Tech Opportunities managing director Darren Abrahamson. “SumUp’s leadership team have led the company to sustained and accelerated growth.”