Adyen lost $13 billion in market cap last month when investors scrambled to sell shares after the payments company missed quarterly revenue targets. But it’s not the only one facing the music in fintech. Shares in SumUp, a privately-held European payment technology business that focuses on point-of-sale transactions, are currently are being sold in inside sales (to other existing investors in the company) at a valuation that might be as low as $4.1 billion — a drop of nearly 52% on SumUp’s previous valuation of $8.5 billion, achieved when it raised $624 million in June 2022.
Several of SumUp’s investors are selling off shares, but the news was made public by just one: Groupon, which is traded in the U.S. on Nasdaq, disclosed the transaction in an SEC filing. Its 8-K form noted that the share purchase agreement, made on October 6, represents 9.4% of the company’s 2.3% interest in SumUp. The sale, it said, would yield Groupon €8.4 million, or around $8.9 million.
The class of shares getting sold is not being made public, hence the question mark about the total resulting valuation for SumUp.
“The Purchase Agreement was entered into in connection with a transaction in which several other investors in SumUp also agreed to sell shares on the same economic terms as the Company,” the filing noted. Groupon said it expects the transaction to close by October 23, and that the buyers are other existing shareholders.
SumUp, which has its roots in Berlin, is headquartered in Luxembourg, and it offers point of sale technology and related business services. In addition to Groupon, SumUp has around 35 investors, including the likes of Bain, BlackRock, Global Founders Capital, Oaktree, Amex, and BBVA.
SumUp confirmed the secondary transaction to TechCrunch but would not comment on valuation. In a statement, it also said SumUp investors “continue to support SumUp through additional investment.”
It declined to say whether there would be more equity funding coming up; the company announced a $100 million credit facility in August from Victory Park Capital to build out a cash-advance product for merchants.
“Our shareholders from time to time trade among themselves and are able to set a share value expedient to their requirements at the time of their trade. Small secondary transactions between existing shareholders often are not representative of the true value of the company, especially where different classes of shares change hands,” a spokesperson said. “The global investment community, as well as existing SumUp investors, recognised our ability to scale and our remarkable long-term prospects and continue to support SumUp through additional investment. We can’t comment on the buyer of the shares at this time.”
Overall, the fintech market has not been spared in the downturn in funding that has hit the technology industry. Research from Tracxn found that in Q3 total funding in the UK — the capital of fintech in Europe, and thus a bellwether for how fintech as a whole is doing — dropped by 77% in to $279.1 million versus $1.2 billion a year before, with no rounds breaking the 9-figure mark among them, and no newly-minted “unicorns.” Payments startups, along with those in insurance and remittance, stood out as the best performers, it added.
The market has seen other valuation haircuts among fintechs that are still private. Among them, Stripe in the U.S. halved its valuation to $50 billion earlier this year. And in Europe, Checkout.com, once valued at $40 billion, reportedly now has an internal valuation of less than $10 billion.
As for Groupon, at the end of March, the Chicago-based local deals marketplace appointed a new CEO out of Czech Republic, Dusan Senkypl, whose firm had become a majority shareholder of the company. Groupon has been doing better since then: when Senkypl took over, the company had a market cap of just $103 million. Today, it’s bounced up to over $300 million. But it has not fared well on the back of today’s depreciated share sale: the stock dropped more than 35% in trading on the news.