London-based fintech startup SumUp announced this week that it has secured €285 million ($307 million) in new funding. The round was led by Sixth Street Growth, with participation from previous backers Bain Capital Tech Opportunities, Fin Capital, and Liquidity Group.
SumUp provides mobile point-of-sale services, payments processing, invoicing, loyalty programs and other financial services to approximately 4 million small businesses across 36 countries in Europe, the Americas, and Australia. This latest capital injection brings SumUp’s total raised to date to around $1.5 billion.
The company plans to use the fresh financing to continue expanding organically into new geographies and to make strategic acquisitions. M&A will enable SumUp to accelerate growth and quickly roll out new products and services to its existing merchant base.
The funding comes on the heels of a turbulent year for fintech companies, with global investment in the sector plunging 36% amidst rising interest rates, fears of recession, and other economic headwinds. High-flyers like Klarna, Stripe, and Checkout.com have all taken huge haircuts to their valuations while public fintech players like Block, PayPal and Adyen have seen their share prices crater.
SumUp has not been immune to the industry turmoil. Its internal valuation likely dropped significantly from the $8.5 billion it hit in 2022. However, the company touts 30%+ year-over-year revenue growth and positive EBITDA since Q4 2022, signaling a path to profitability.
The ability to show consistent expansion and a roadmap to sustainability was key in securing investor confidence and fresh financing, according to Nari Ansari, Managing Director at lead investor Sixth Street Growth. Ansari also called out SumUp’s culture of innovation and prudent approach to growth investing as further reasons to bet on the company’s future.
By taking in new capital now when most fintechs cannot, SumUp is clearly trying to use the market downturn to its strategic advantage. The company can go shopping for distressed startups at bargain prices while doubling down on its in-house product roadmap.
If the economic climate worsens, SumUp is also better positioned to weather the storm thanks to its substantial cash reserves. And if a rebound comes sooner than expected, the company will have the fuel to rapidly seize new opportunities.
After over a decade in business, SumUp has reached significant scale and built a diverse financial services ecosystem for SMBs. Its ability to raise big money in a punishing market is a testament to its sticky merchant base and the large market opportunity still ahead. How SumUp leverages its newly stocked war chest and the macro conditions in 2023 will determine whether it can break out as a long-term fintech leader.