A customer uses a SAMUP payment card reader on September 13, 2019 in Lisbon, Portugal.
Angel Garcia | Bloomberg via Getty Images
London-based UK-based payment processor Sumaup Marketing has bought startup FiveStar to grow its presence in the US and fight giants like PayPal and Square.
The company said Thursday it was buying FiveStar for মিশ 317 million in a mix of cash and stock. The San Francisco-headquartered FiveStar merchants help set up reward schemes and promotions for customers.
Founded in 2012, SAMAP is best known for its small credit card readers which allow small businesses to accept payments. Merchants also provide other payment tools, including the ability to set up their own online stores. It has signed up more than 3 million merchants across Europe, the United States and Latin America.
SumUp competes with Sweden’s iZettle, which was acquired by PayPal in 2018, as well as Jack Dorsey’s Square. As start-ups plan to expand into the United States, the competition with those big players is set to intensify. But SumUp thinks there is enough room for different companies to co-exist.
“I would say that’s where we focus the most and Excel is really on the smallest traders,” Andrew Helms, managing director of Sumaup, told CNBC. “We don’t want to go into the enterprise, we’re not going any further upstream.”
Helms said spending patterns in the U.S. market have changed during the coronavirus epidemic, including increased payment options such as non-physical transactions, invoicing and payment links.
However, “we’re probably underestimating the transition to stores and bricks and mortar” because the Covid restrictions have been lifted and people are meeting again in person.
Prior to the deal with Sumup, FiveStar raised a total of $ 115 million and won support from investors, including Lightspeed Venture Partners and Menlo Ventures, according to Crunchbase.
Meanwhile, Sumaup has raised a total of .4 1.4 billion in equity and debt financing since its inception. The company has been supported by Goldman Sachs, Temasek of Singapore and Bain Capital.