28. May 2013–
European mobile payments service SumUp has announced a “double-digit” million euro investment from American Express and troubled discount deals site Groupon.
This is a first-time investment for the two companies in SumUp. In August last year, SumUp secured a $20m Series A round from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and early Facebook and Skype investor Klaus Hommels. All these investors have also contributed to the latest funding round.
The financing will be used to help the payments company expand into new markets and to improve its technology. This is extremely important in a fiercely competitive market where the many European providers (including SumUp's main rivals Payleven and iZettle) are constantly racing to differentiate themselves by offering more advanced technology, partnerships and security features. American Express is also, interestingly, an investor in Swedish competitor iZettle.
When asked how SumUp is standing out in the crowded market, SumUp cofounder Stefan Jeschonnek told VentureVillage that the company has the widest scope: "It has the largest international footprint of any mobile POS. Plus, we have built a full end-to-end payment system. The entire system is built in-house, meaning we can move much faster in international markets."
This system should be improved with the extra capital – the company also wants to develop new point-of-sale services.
Commenting on the funding, SumUp CEO Daniel Klein said: "As one of the world's largest card issuers, American Express is at the forefront of driving innovation in payments. Groupon has proven that it is possible to build a company serving millions of small merchants worldwide in a short period of time. This unique blend of experiences has been a driving factor for us in taking them on as new investors."
The news comes after SumUp expanded to Russia and announced that it was testing SumUp Pay, a service that, similarly to Square Wallet, lets users pay for things just by saying their names – without having to take out their phone or wallet. Jeschonnek says SumUp Pay will be launched later this year.
SumUp was launched in Germany in 2011 but is now headquartered in Dublin. At the moment, it is available in 11 countries in Europe, including the UK, Germany, Ireland, Austria, the Netherlands, Spain, Italy, France, Portugal, Belgium and Russia. SumUp collaborates with Visa and MasterCard, though Jeschonnek told us that American Express will be integrating with SumUp this summer.
A surprising move from Groupon
It seems surprising that Groupon is investing in the mobile payments company, especially after the company fired CEO and cofounder Andrew Mason just over a month ago after massively disappointing post-IPO results, losing three quarters of its market value since listing. However, at the end of 2012 Groupon had $1.2b in cash and cash equivalents – which it clearly wants to invest outside of the deals industry.
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