European rival to PayPal and Square makes $317 million acquisition to expand in the U.S.

4 days ago

A lawsuit uses a SumUp outgo paper scholar successful Lisbon, Portugal, connected Sept. 13, 2019.

Angel Garcia | Bloomberg via Getty Images

LONDON — SumUp, a U.K.-based outgo processor, has acquired selling start-up Fivestars successful a bid to grow its scope crossed the U.S. and instrumentality connected giants similar PayPal and Square.

The institution said Thursday it was buying Fivestars for $317 cardinal successful a premix of currency and stock. San Francisco-headquartered Fivestars helps merchants acceptable up rewards schemes and promotions for customers.

Founded successful 2012, SumUp is champion known for its tiny recognition paper readers that fto tiny businesses judge payments. The institution besides provides different outgo tools, including the quality for merchants to acceptable up their ain online stores. It has implicit 3 cardinal merchants signed up crossed Europe, the U.S. and Latin America.

SumUp competes with Sweden's iZettle, which was acquired by PayPal successful 2018, arsenic good as Jack Dorsey's Square. As the start-up plots an enlargement successful the U.S., rivalry with those large players is acceptable to intensify. But SumUp thinks there's capable country for a fig of antithetic companies to co-exist.

"I would accidental wherever we absorption and excel is genuinely connected the smallest merchants," Andrew Helms, U.S. managing manager astatine SumUp, told CNBC. "We're not looking to spell into enterprise, we're not going much upstream."

Helms said the U.S. marketplace has seen a displacement successful spending patterns during the coronavirus pandemic, with outgo options similar non-physical transactions, invoicing and outgo links seeing accrued growth.

However, "we're astir apt underestimating the displacement backmost to in-store and ceramic and mortar" arsenic Covid restrictions are lifted and radical are gathering in-person again, helium added.

Prior to the woody with SumUp, Fivestars had raised a full of $115 cardinal and won backing from investors including Lightspeed Venture Partners and Menlo Ventures, according to Crunchbase.

SumUp, meanwhile, has raised a full of $1.4 cardinal successful equity and indebtedness financing since its inception. The institution has been backed by the likes of Goldman Sachs, Singapore's Temasek and Bain Capital.