SumUp Acquires Fivestars for $317 Million 

The acquisition places SumUp in a better position to compete against Paypal and Square.

Sum-Up-Acquires -Fivestars-for-$317-Million 
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Payments processor SumUp is acquiring the U.S. startup Fivestars. The $317 million acquisition will help the U.K.-based SumUp to expand its offerings into the United States.

SumUp provides smaller credit card readers to three million merchants across Europe, Latin America, and now the U.S. Its primary competitors are the Swedish firm acquired by Paypal, iZettle, and Square.

SumUp’s U.S. managing director Andrew Helms said he believes there’s room for all of the companies to thrive.

“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,” said Helms.

The acquisition of the marketing firm Fivestars is a cash and stock transaction. Fivestars, which is headquartered in San Francisco, aids merchants in setting up rewards and promotions for their consumers.

Helms said there’s been a spending pattern shift in the U.S. during the pandemic, and non-physical transactions have been on the increase.

But in regards to store reopenings, he acknowledged, “We’re probably underestimating the shift back to in-store and brick and mortar,” Helms said.

The deal will give SumUp access to Fivestar’s customer base of 12,000 and transfer $3 billion of sales each year.

SumUp was founded in 2012, and in addition to its card readers, it offers other types of payment tools, including online store setups.

Before its deal with SumUp, Fivestars raised $115 million from investors such as Menlo Ventures and Lightspeed Venture Partners. 

SumUp previously raised $1.4 billion in financing since the company began in 2012. Its backers have been Goldman Sachs, Bain Capital, American Express, Groupon, and Temasek. Earlier in March 2021, SumUp raised $895 million in a funding round.

 

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