Paypal rival SumUp acquires Fivestars for $317 million
London-based payments platform, SumUp, has announced the acquisition of Fivestars, a marketing automation platform for $317 million in what is seen as its entry into the US and a direct challenge to its rival Paypal.
Fivestars is a local commerce network in the US that integrates an automated marketing platform along with payments and loyalty and, likely, this new platform born through the acquisition will further bolster the integration of merchants and help them ease the payments systems for these merchants and businesses. Through this acquisition, SumUp would be able to get access to the vast userbase of Fivestars which is expected to have around 70 million users and 12,000 small businesses and it is reported to have $3 billion in sales and 100 million transactions annually.
“We founded Fivestars to allow small businesses 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,” Victor Ho, CEO of Fivestars, said.
This acquisition is likely to heat the payments space within the US and should put some pressure on Paypal at a time when Paypal is looking to become a financial superapp. It makes sense for SumUp to choose this time to expand as globally, the payments industry has been one of the most sought-after industries by both investors and users following the pandemic. The number of digital payments being made has increased exponentially over the last couple of years with many people getting used to the idea of making digital payments and using wallets for even simple and basic needs. The merchants have also realized this and hence are always looking for payment solutions that make integration and accounting much easier for them.
“SumUp is a market leader because of our support for, and belief in, small businesses. 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,” said Marc-Alexander Christ, SumUp co-founder.
SumUp raised 750 million pounds in March and has a presence in 3 continents and would hope that its foray into the US at this crucial time would bear fruit like its entry into other markets in the past, despite strong competition.