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SumUp’s multimillion-dollar acquisition of Fivestars will strengthen its US presence to ensure it can compete against PayPal, Square and others.
UK-based payments company SumUp has acquired US payments and loyalty marketing platform Fivestars in a deal worth $317m.
The acquisition is part of SumUp’s plan to expand into the US and take on its competitors such as Square and PayPal. While the company has been active in the US for several years, it does not yet have a very strong presence.
SumUp was founded in London in 2012 before Square’s international expansion into the European market.
Despite competition for customers in its native Europe, SumUp has grown steadily. It serves around 3m merchant users in 34 different markets. Earlier this year, the company partnered with Berlin neobank N26 to make accessing cashless payments easier.
The company’s co-founder, Marc-Alexander Christ, said, “Our global community of merchants has battled through lockdowns and volatility and we’re confident that this acquisition will further energise the US’s recovering small business economy. Now is the time to make sure our presence is as strong in the US as it is in Europe and, by acquiring Fivestars, SumUp will deliver for US-based merchants as it has in other international markets.”
SumUp, which did not have a loyalty product until this acquisition, will use Fivestars’ knowledge of its US customer base to tap into the market there. The company already has strong markets in Europe and Latin America.
According to SumUp’s managing director for the US, Andrew Helms, the company’s plan is to keep using Fivestars’ branding while integrating its services into the SumUp platform.
Since Fivestars’ launch in 2011 in San Francisco, it has become a popular product used by more than 65m people, who have in turn driven sales to around 14,000 businesses.
The company has raised more than $115m from its investors, which include Lightspeed, DCM, Menlo Ventures, HarbourVest and Salt Partners.
According to CEO and co-founder of Fivestars, Victor Ho, “We founded Fivestars to give small businesses the opportunity to thrive in the digital economy and over the years, we’ve achieved just that. Understanding that SumUp shares this mission, it was an easy decision to partner, and together, we look forward to supporting a retail market that champions small business success.”
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