SumUp Faces Lower Valuation Amid Investors' Share Sell-Off

Published 6 months ago

SumUp, a European payment technology company focusing on point-of-sale transactions, is facing a drop in valuation. The privately-held firm’s shares are being sold to existing investors at a potentially reduced valuation of $4.1 billion, a 52% decrease from its previous valuation of $8.5 billion.

Groupon Discloses Share Sale

The sell-off of SumUp’s shares was disclosed by Groupon, a U.S. Nasdaq-traded company, in an SEC filing. Groupon’s transaction represents 9.4% of its 2.3% interest in SumUp. The sale is expected to yield Groupon approximately $8.9 million. The specific class of shares sold has not been disclosed, leaving the total resulting valuation for SumUp uncertain.

SumUp Investors Continue to Show Support

Despite the share sell-off, SumUp maintains that its investors continue to provide additional investment. However, the company refrained from commenting on its valuation. An official statement from SumUp noted that the trading of shares among shareholders is normal and does not always reflect the company’s true value.

Fintech Market Faces Downturn

The broader fintech market has not been immune to a downturn in funding. In the U.K. alone, total funding dropped by 77% to $279.1 million in Q3 as compared to $1.2 billion the previous year. Additionally, other private fintech companies have also seen a reduction in valuation, including Stripe and Checkout.com.

Groupon’s Market Cap Increases

Despite the depreciated share sale, Groupon has seen an increase in its market cap since the appointment of its new CEO, Dusan Senkypl. The company’s market cap rose from $103 million to over $300 million under Senkypl’s leadership. However, the recent news of the share sale led to a drop of more than 35% in Groupon’s stock trading.