Customers will use the SumUp payment card reader in Lisbon, Portugal on September 13, 2019.
Angel Garcia | Bloomberg via Getty Images
London — UK-based payment processor SumUp has acquired marketing startup Fivestars, expanding its reach throughout the United States and acquiring giants such as PayPal and Square.
The company announced Thursday that it would buy Fivestars in a cash-stock combination for $ 317 million. Headquartered in San Francisco, Fivestars helps merchants set up reward schemes and promotions for their customers.
Founded in 2012, SumUp is best known for its small credit card readers that allow small businesses to accept payments. The company also offers other payment tools, such as the ability for merchants to set up their own online store. Over 3 million merchants are registered in Europe, the United States and Latin America.
SumUp is competing with Sweden’s iZettle, which was acquired by PayPal in 2018, and Jack Dorsey’s Square. Competition with these big companies will intensify as start-ups plan to expand in the United States. However, SumUp believes there is plenty of room for many different companies to co-exist.
Andrew Helms, US Managing Director of SumUp, told CNBC: “We are not going to enter the company. We are not going any further upstream.”
According to Helms, the US market has seen changes in spending patterns during the coronavirus pandemic, increasing payment options such as non-physical transactions, billing and payment links.
However, he added, “it may be underestimating the shift to in-store and physical stores,” as Covid’s restrictions are lifted and people meet again in person.
Prior to the deal with SumUp, Fivestars raised a total of $ 115 million with support from investors such as Lightspeed Venture Partners and Menlo Ventures, according to Crunchbase.
Meanwhile, SumUp has raised a total of $ 1.4 billion in equity and debt financing since its inception. The company is backed by Goldman Sachs, Temasek of Singapore and Bain Capital.
Settlement company SumUp makes $ 317 million acquisition to expand in the U.S.
Source link Settlement company SumUp makes $ 317 million acquisition to expand in the U.S.