SumUp settles for €8B valuation as fintech startups lower targets

SumUp's new capital raise values the payments specialist at €8 billion (around $8.4 billion), significantly below the €20 billion price tag it was reportedly seeking at the start of the year.  

As the global venture market faces a reset, raising capital can be increasingly challenging for startups. Many are lowering their valuation ambitions in order to raise new funding—making the likelihood of down rounds more of a reality. 

The London-based company, which raised €590 million in equity and debt in its new round, was previously estimated to be worth €370 million following a funding round in 2017. However, in January, SumUp was said to be looking to raise more than $500 million at a valuation above $22 billion—which would have made it the UK's third-most valuable fintech behind Checkout.com and Revolut, according to PitchBook data.

SumUp, which provides card readers and payments services to small business owners, is now the fifth on the list of most valuable UK fintech companies. The latest round was led by Bain Capital Tech Opportunities, with investors including BlackRock, Btov Partners, Centerbridge and Fin Capital also participating.

The company isn't alone in adjusting its valuation target, and other fintech startups are themselves facing the prospect of valuation cuts. The Wall Street Journal recently reported that buy now, pay later provider Klarna is in talks with investors about a deal that could value it at around $15 billion, a significant drop from the $45.6 billion price tag it reached last year. Tax platform MainStreet is also said to be raising new funding, which could see the startup's valuation fall by 60%, TechCrunch reported.

Global VC activity in fintech has been falling since its peak in Q3 2021, according to PitchBook data. So far this quarter, companies in the space have raised $21.7 billion in capital and with Q2 nearly over, total funding seems likely to fall short of Q1.  
SumUp is planning to use the funds to expand into new markets, with Peru being its most recent entry, and to pursue acquisitions. In the past two years, SumUp has acquired three companies: Goodtill, Tiller and Fivestars.

Featured image courtesy of SumUp
 

This article originally appeared on PitchBook News