SumUp’s valuation falls as low as $4.1B, as Groupon and others sell off their stakes

In a recent development, SumUp, the European payment technology business known for its focus on point-of-sale transactions, has seen its valuation plummet as low as $4.1 billion. This significant drop of almost 52% from its previous valuation of $8.5 billion comes as Groupon and other investors sell off their stakes in the company. Groupon, a publicly traded company on Nasdaq, disclosed the transaction in an SEC filing, revealing that it expects to yield around $8.9 million from the sale. While the class of shares being sold is undisclosed, the secondary transaction raises questions about SumUp’s total resulting valuation. Despite this setback, SumUp states that its investors continue to support the company through additional investment.

SumUp’s Valuation Falls as Low as $4.1B

In the world of fintech, valuations can be a fickle thing. Just ask SumUp, the European payment technology business that focuses on point-of-sale transactions. According to recent reports, SumUp’s valuation has plummeted to as low as $4.1 billion, a significant drop from its previous valuation of $8.5 billion.

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Background on SumUp’s Valuation

SumUp, a privately-held company with its roots in Berlin, offers point-of-sale technology and related business services. It has attracted significant investment from a range of investors, including Bain, BlackRock, Global Founders Capital, Oaktree, Amex, and BBVA. These investors have been instrumental in supporting SumUp’s growth and development.

Previously, SumUp achieved a valuation of $8.5 billion in June 2022 when it raised $624 million. However, recent inside sales have raised questions about the true value of the company.

Inside Sales of SumUp’s Shares

Inside sales refer to the selling of shares to existing investors in a company. In SumUp’s case, several of its investors, including Groupon, have chosen to sell off their shares, leading to a potential valuation of $4.1 billion. The sale, as disclosed in an SEC filing by Groupon, represents 9.4% of the company’s 2.3% interest in SumUp.

The specific class of shares being sold has not been made public yet, leaving uncertainty about the total resulting valuation for SumUp. It is important to note that small secondary transactions between existing shareholders may not accurately represent the true value of the company, especially when different classes of shares are involved.

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Groupon’s Involvement in the Transaction

Groupon, a U.S.-traded company on Nasdaq, is one of SumUp’s investors. Its recent disclosure in an SEC filing shed light on the inside sales transaction. According to the filing, Groupon expects to yield €8.4 million, or around $8.9 million, from its share sale.

While Groupon’s involvement in the transaction provides some insight into the current state of SumUp’s valuation, it does not provide a complete picture. The class of shares being sold and the overall implications for SumUp’s total valuation remain uncertain.

Uncertainty Surrounding Total Valuation

Due to the lack of public information regarding SumUp’s inside sales, there are still question marks surrounding the company’s total valuation. Without clarity on the class of shares being sold and the economic terms of the transaction, it is difficult to determine the exact impact on SumUp’s valuation.

It is important to keep in mind that valuations can fluctuate based on various factors, including market conditions, investor sentiment, and the performance of the company itself. While the current valuation may seem low compared to the previous figure, it is crucial to consider the long-term prospects and potential future growth of SumUp.

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Other Investors in SumUp

SumUp has a diverse range of investors supporting its growth and development. In addition to Groupon, the company has around 35 other investors, including prominent names like Bain, BlackRock, Global Founders Capital, Oaktree, Amex, and BBVA.

The support from these investors demonstrates confidence in SumUp’s ability to scale and succeed in the payment technology industry. While some investors are choosing to sell off their shares, the overall support from the investor community remains strong.

There is also a possibility of more equity funding in the future, although SumUp has not confirmed any specific plans. In August, the company announced a $100 million credit facility from Victory Park Capital to develop a cash-advance product for merchants. This highlights SumUp’s commitment to innovation and continued growth.

Confirmation from SumUp

SumUp has confirmed the secondary transaction but has chosen not to comment on the valuation. In a statement, the company emphasized its focus on long-term prospects and its ability to attract support from both the global investment community and existing SumUp investors.

SumUp acknowledged that shareholders occasionally trade shares among themselves, which may not accurately reflect the true value of the company. The company remains committed to its vision and believes in its remarkable long-term prospects.

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Fintech Market Downturn

SumUp’s valuation decline is not an isolated incident in the fintech industry. The sector has experienced a downturn in funding, mirroring the broader technology industry. In the United Kingdom, a bellwether for fintech in Europe, total funding dropped by 77% in Q3 to $279.1 million, compared to $1.2 billion the previous year.

This challenging funding environment has affected the valuation of many fintech companies. Stripe, a prominent payment technology company in the United States, halved its valuation to $50 billion earlier this year. Similarly, Checkout.com in Europe, once valued at $40 billion, reportedly now has an internal valuation of less than $10 billion.

Despite these valuation adjustments, payments startups have performed relatively well compared to other sectors in the fintech industry. The future of fintech remains uncertain, but payments technology continues to show promise.

Groupon’s Recent Performance

Groupon, SumUp’s investor, has experienced significant changes in recent months. The company appointed a new CEO, Dusan Senkypl, from the Czech Republic, who became a majority shareholder of Groupon. Since Senkypl’s appointment, Groupon’s market cap has risen from just $103 million to over $300 million.

However, Groupon’s stock experienced a sharp decline of more than 35% following the news of SumUp’s depreciated share sale. This demonstrates the interconnectedness of companies within the fintech industry and the impact that one company’s valuation can have on others.

In conclusion, SumUp’s recent valuation drop highlights the volatility of the fintech market. While the current valuation may be lower than anticipated, it is essential to consider the long-term prospects, the support from investors, and the overall performance of the company. The fintech industry as a whole is experiencing challenges in funding, leading to valuation adjustments across various companies. As the market continues to evolve, it will be interesting to see how SumUp and other fintech players navigate the changing landscape.

Source: https://techcrunch.com/2023/10/10/sumup-groupon-valuation/