SumUp raises €590M in debt and equity at €8B valuation

SumUp, a London-based maker of point-of-sale payments solutions for small businesses, raised €590 million in equity and debt funding led by Bain Capital Tech Opportunities at an €8 billion valuation.

Why it's the BFD: The deal reflects softening valuations for European fintech companies, given reports from earlier this year that investors were floating a €20 billion mark.

• That's indicative of what's happening in the broader fintech market, Michael Schrezenmaier, CEO of Europe at SumUp, says. “Timing is everything," he says. "At our stage, people always compare us to public companies.”
• But it still represents a massive step up for the company, which last raised equity funding at a €400 million valuation in 2017.
• “Six months ago, the multiples would have been different. But if you raised at $40 billion last year and now have to raise at $20 billion, that’s a bigger problem,” he added.

Between the lines: Without explicitly naming them, Schrezenmaier is referring to Swedish fintech Klarna — which was once Europe's most valuable startup with a $45 billion valuation but now is said to be seeking new funds at around $15 billion.

State of play: Valuation aside, Schrezenmaier noted the importance of raising now to help the company brave the uncertainty in the market.

• “We believe we’re entering a phase of significant economic turbulence," he said. "We felt that in these market conditions where it is very difficult to raise, having a war chest is a huge advantage.”

Details: The round was split evenly between debt and equity. Other investors include BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital and Sentinel Dome Partners.

• Schrezenmaier says the company continues to raise debt because, "part of the team is German, and we’re cheap bastards ... [But] a lot of it is due to the strength of the cash flows we’re producing. Debt is very cheap. If we can service the debt, why would we dilute?”
• Last year, it raised €750 million in debt from Goldman Sachs, Temasek, Bain Capital Credit, Crestline, and Oaktree. The company now has just over €1 billion in debt outstanding, Schrezenmaier said.