Innovators in financial services are under pressure. The money became more difficult to collect. Investors are reluctant to open their checkbooks to the gigantic levels of the last decade. Companies like Fast which fired the stratosphere of the wave of hot steam, crashed and burned this spring as capital began to dry up. Publicly traded fintech companies have also seen their shares decline in a similar way.
Against this background, it is encouraging to see companies overcome declines and raise fresh capital. SumUp is the latest fintech to do so, having just added € 590 million to its balance sheet in a new round of funding. The cash flow management app provided an estimate of € 8 billion on the back of the increase. The enlargement has already raised more than 1.5 billion euros in funding since its launch in 2012.
“I am very proud of the team to complete a successful round of financing in the current market with large investors – this is indicative of our strength, performance and potential,” said Mark-Alexander Christ, co-founder and CFO of SumUp. “The funds we have raised will allow us to continue to build our product ecosystem, expand into new markets, pursue value-added acquisitions and continue to level the playing field for small retailers globally.”
Bain Capital Tech Opportunities led to the increase. Darren Abrahamson, managing director of the venture capital firm, said the investor was impressed with SumUp’s ability to “enable a growing and diverse field of small business with payment solutions and tools to effectively connect with its day-to-day customers.”
BlackRock, btov Partners, Centerbridge, Crestline, Fin Capital and Sentinel Dome Partners were among other supporters who injected money into the € 590 million funding round raised by SumUp. The circle is a combination of debt and equity.
The 590 million euro funding round raised by SumUp will allow the company to expand globally. The company is now available in 35 countries and employs over 3,000 people.
The 590m-euro SumUp funding round is outpacing the trend
SumUp’s new money injection contradicts the overall mood of the fintech industry recently. After swelling during the coronavirus crisis, the sector is now rapidly deflating.
Falling investment levels are a clear indication of this trend. Fintech companies raised a record $ 84.5 billion through 2,356 venture capital deals in 2021, according to research firm GlobalData. That’s more than $ 30.7 billion raised in 2020 in 1,772 transactions.
Although there has been a significant slowdown in venture capital transactions this year, the industry looks set to continue to exceed the levels seen in 2020. So far, the fintech industry has raised $ 23.9 billion from 750 deals in 2022.
Renowned market champions such as the Swedish buy-and-pay-company (BNPL) Klarna have been caught in the flood. After reaching an estimate of 46.5 billion dollars last year against the background of a $ 639 million round of fundingon quadradecacorn he could withstand a humble descent now. newspapers announced in June that Klarna wanted to raise a $ 500 million round of funding at an estimated $ 15 billion. The news comes after Klarna announced her plans to cut 10% of its workforce due to changing market conditions.
Clarna is not alone in laying off staff. Start payment processing Boltmortgage broker Better.com and a tax credit company main Street are just three other fintech companies forced to lay off workers this year.
Publicly traded fintech companies have also suffered a blow. Klarna Affirm’s rival lost more than 80% of its market capitalization since its peak in November. BNPL business Laybuy similarly fell from a peak of $ 2.00 to a price of $ 0.05.
Engaged in the industry PayPal fell from $ 308 for the five-year high in July last year to trade at $ 72.97 at the time of writing. Twitter founder Jack Dorsey’s formerly known as Block, formerly known as Square, saw its shares fall from $ 276 in February 2021 to $ 60.63 in June 2022.
IN cryptocurrency industry the continuing problems are similarly related to the decline. Crypto champions Crypto.com and Coinbase face similar difficulties as the value of digital assets such as bitcoin continues to collapse.
GlobalData is the parent company of Verdict and its sister publications.