SumUp, a European payment technology business that specializes in point-of-sale transactions, is facing a significant drop in valuation as several investors, including Groupon, sell off their shares. The privately-held company is currently being sold in inside sales to existing investors at a valuation as low as $4.1 billion. This represents a decrease of almost 52% from SumUp’s previous valuation of $8.5 billion, which it achieved in June 2022 after raising $624 million.
Key Takeaway
SumUp, a European payment technology business, is experiencing a sharp decline in valuation as several investors, including Groupon, sell off their shares. The company’s valuation is now estimated to be as low as $4.1 billion, a significant drop from its previous valuation of $8.5 billion.
Groupon, a US-based company traded on Nasdaq, disclosed the transaction in an SEC filing. According to the filing, Groupon’s sale of shares represents 9.4% of its 2.3% interest in SumUp, and it is expected to yield €8.4 million (approximately $8.9 million). The specific class of shares being sold has not been made public, leading to uncertainty about the resulting valuation for SumUp.
SumUp, which has its roots in Berlin but is now headquartered in Luxembourg, offers point-of-sale technology and related business services. Alongside Groupon, the company has around 35 investors, including prominent names such as Bain, BlackRock, Global Founders Capital, Oaktree, Amex, and BBVA.
The secondary transaction has been confirmed by SumUp, but the company has declined to comment on the valuation. However, it did state that its investors continue to support the company through additional investment. When asked about the possibility of more equity funding, SumUp did not provide any details but mentioned a recent $100 million credit facility from Victory Park Capital to develop a cash-advance product for merchants.
Fintech companies, including SumUp, have not been immune to the funding downturn in the technology industry. In the UK, a bellwether for European fintech, total funding in the sector dropped by 77% in Q3, with no rounds surpassing $100 million. While payments startups have performed relatively well, other fintechs have also seen their valuations take a hit. Companies like Stripe in the US and Checkout.com in Europe have experienced significant valuation cuts.
Groupon, on the other hand, appointed a new CEO earlier this year and has seen some improvements since then. However, the company’s stock dropped more than 35% following the news of its depreciated share sale.
