The SumUp-acquired company Fivestars had previously raised a total of $115 million and seen support from investors, including Lightspeed Venture Partners and Menlo Ventures.
By Oluwapelumi Adejumo
Updated
3 mins read
In an effort to expand and strengthen competition with rivals in the United States, a UK-based payment process SumUp has acquired Fivestars, a market startup.
A statement from the company on Thursday indicated that the acquisition of the San Francisco-headquartered startup specializing in setting up rewards schemes and promotions for merchants was worth about $317 million, made up of a combination of cash and stock.
SumUp is the provider of small credit card readers that allows small businesses to accept payments from customers. The company, founded in 2012, also offers other payment tools, including setting up online stores for merchants. Its merchants base is over 3 million spread across Europe, the US, and Latin America.
“The acquisition is SumUp’s first in the US and will provide the company with access to the more than 70 million consumer-members and 12,000 small businesses within Fivestars’s network, which currently drives over $3 billion in sales and 100 million transactions per year,” the press statement reads in part.
In the United States, PayPal-acquired iZettle and Jack Dorsey-owned Square are the major competitors of SumUp. As earlier said, its latest expansion is expected to heighten the rivalry with the giant tech companies. Although, SumUp thinks there is room for the co-existence of different companies dealing in the same business.
“The acquisition will enable both companies to offer essential payments and marketing automation services to small business owners across the US and globally,” the company said.
While speaking with CNBC, the US managing director at SumUp Andrew Helms told the media:
“I would say where we focus and excel is truly on the smallest merchants. We’re not looking to go into enterprise, we’re not going more upstream.”
The director revealed that there has been a shift in the spending pattern in the US market due to the covid-19 pandemic, and as such, all available payment options, including non-physical transactions, invoicing, and payment links, have seen a massive surge.
He continued that they are “probably underestimating the shift back to in-store and brick and mortar” as Covid restrictions are lifted, and people are meeting in-person again.
Available information from Crunchbase shows that the SumUp-acquired company, Fivestars, had previously raised a total of $115 million and seen support from investors, including Lightspeed Venture Partners and Menlo Ventures.
Meanwhile, SumUp has raised a total of $1.4 billion in equity and debt financing since it was founded. It has the backing of notable firms like Goldman Sachs, Singapore’s Temasek, and Bain Capital.
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Oluwapelumi is a believer in the transformative power Bitcoin and Blockchain industry holds. He is interested in sharing knowledge and ideas. When he is not writing, he is looking to meet new people and trying out new things.