SumUp, a London-based payments service provider, has announced its acquisition of Fivestars, a major US commerce network. The transaction is said to be worth $317 million, with around half in cash and the rest in stock.
SumUp appears to be strengthening its position as it expands into new areas by acquiring Fivestars. “Essential payments and marketing automation services” will be provided to small businesses in the United States and elsewhere across the world.
SumUp is a fast-growing company with a long history in the loans industry. It has taken more than a dozen deals to date, and it has closed partnerships with companies such as Lending Club and Funding Circle.
Its parent company, SumUp Financial Group, also offers merchant financing through its online lending program for businesses around the world. In fact, it’s been operating since 2004—just three years after PayPal launched!
Fivestars was started in 2005 by one of the original developers of PayPal – Cameron Winklevoss (aka “the Bitcoin Baron”). It has more than 70 million consumer-members and 12,000 small vendors within its network. More than $3 billion in sales are driven each year thanks to its technology.
CFO Rajani Kannan said the deal was a milestone in bringing together “two powerful platforms with complementary expertise.”
Ho, who co-founded the firm and serves as its CEO, will continue to manage operations from its San Francisco headquarters. According to SumUp, the acquisition will provide SMBs with improved technology services that will help them save money on payments while also generating revenue through smart automated marketing.
After Covid, a follow-up power restoration is required.
“Our global community of merchants has battled through lockdowns and volatility and we’re confident that this acquisition will further energize the U.S.’s recovering small business economy,” explained Marc-Alexander Christ, SumUp Co-founder.
“Now is the time to make sure our presence is as strong in the U.S. as it is in Europe and, by acquiring Fivestars, SumUp will deliver for U.S.-based merchants as it has in other international markets.”
With SumUp, Fivestars generated $115 million in seed investments, with such firms as Lightspeed Venture Partners and Menlo Ventures playing a significant part.
SumUp, on the other hand, received $1.4 billion in equity and debt financing from Goldman Sachs, Temasek, or Bain Capital. The firm has more than 2,800 employees working across three continents.
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