Add one more to the list of companies going head-to-head in the area of card payments by way of smartphone attachments: today, Berlin-based SumUp is opening up for business in the UK, Germany, Ireland and Austria, backed by an eight-figure Series A round, understood by TechCrunch to be over $20 million.
SumUp’s $20 million Series A investment comes from b-to-v Partners, Shortcut Ventures, Tengelmann Ventures and Klaus Hommels, the early Skype, Facebook and Xing investor. Before the $20 million round, SumUp had been bootstrapped by its founders, which include Daniel Klein, SumUp’s CEO, who was also one of the founders of PayPal competitor MoneyBookers (later rebranded as Skrill).
Similar to services like like Square, PayPal’s Here, iZettle, mPowa, Payleven and Intuit’s GoPayment, SumUp works by way of a free dongle that attaches to a smartphone or tablet — in its case an Android or iOS device — which can then be used with an app to read cards and take payments. And like the others, SumUp is targeting the large swathe of merchants and small businesses who currently do not have the facilities to take card payments. But if this sounds a little me-too and crowded, it’s clearly a space where investors still see a lot of opportunity for a startup to make a killing.
SumUp estimates that there are some 20 million small businesses in Europe today, but a large part of them are still only able to take payments by cash and checks because of the costs and infrastructure associated with traditional card payment services. Like others in the mobile payment space SumUp is banking on the growing uptake of smartphones — currently 32% penetration in Europe overall — and the increasing reliance on card transactions — they’re growing by 18% annually — to change that.
What is perhaps noteworthy about SumUp is that it is kicking off with a full launch — not a limited beta — in these four countries, with two of them, Germany and the UK, being some of the largest retail markets in Europe. The biggest competitor in Europe, iZettle, has up to now carved out some market share in the Nordics but is still only in beta in the UK; and of course Square and PayPal, the two biggest players in the U.S., have yet to enter the market here — although that seems to be something coming very soon.
[The launch today comes after a four-month closed beta in Germany, the UK, Ireland and Austria, which had been spotted early on by the German blog Deutsche Startups. The company has some 100 employees working in Berlin, Dublin and London.]
SumUp takes a 2.75% cut of every transaction made using its reader. It currently works with MasterCard, Visa and Europay and Stefan Jeschonnek, the MD and another co-founder, says that it’s currently in discussions with other card companies to extend that list.
You may recall that iZettle has been in a pickle in Europe over Visa cutting off its service because of the method iZettle uses to authenticate card users — iZettle requires a signature, which Visa says doesn’t meet its requirements. SumUp also takes signatures for authentication, but only on MasterCard transactions. For Visa customers get sent an SMS with a secure link, which they have to access on their devices to manually enter their full card numbers.
That sounds cumbersome, but Jeschonnek says SumUp is working on another method to speed up that process in future. “We are looking at different technology that we can use, and we are considering the chip-and-PIN solution [used by merchants who have payment terminals],” he says.
Another notable aspect of SumUp’s service is that the company is already developing the idea as more than just a point-of-sale card payment provision. Merchants have the option of using the app to preload several items that they sell, and that effectively turns SumUp into a kind of cash register.
This is, for now, limited to being used within SumUp’s own service, although Jeschonnek says it is also looking at how it might leverage APIs to offer this kind of functionality within merchant’s own apps.
“But right now we’re mainly focused on the problem of getting merchants to take cards,” he says. “We’re trying to solve a problem that still hasn’t been solved.”
SumUp is the easiest way for small businesses and sole traders to accept credit and debit card payments securely, even on-the-go. Using a free, supremely portable card reader and an app available for iPhone, iPad and Android, artisans, taxi drivers, cafes, restaurants, shops and many other merchants are now able to accept credit and debit card payments with their smartphone or tablet - anytime, anywhere. SumUp only takes a fee of 2.75% per transaction made using the SumUp card...
Klaus is one of the leading European business angels and is or has been involved in numerous successful internet investments including QXL/Tradus, Skype, Facebook, king.com, StarDoll, Xing and spotify. He invests in promising start-ups that have the potential to become major players in the internet space.Klaus started his career at Bertelsmann. He joined AOL Germany in 1995 where was as board member responsible for business development, content and advertising sales. He was also involved in the establishment of Freenet,...
With the establishment of the first online shops a discounter in 2001 took over the Tengelmann Group a pioneer in the e-commerce industry. 2010, the Tengelmann Group one step further and build the e-commerce activities of the entire group continues. The result is the creation of Tengelmann E-Commerce GmbH, a 100% subsidiary of the group, all business topic around the E-commerce brings. As part of its e-commerce strategy, the Tengelmann Group involved since 2009 in rapidly growing, innovative e-commerce...
Shortcut Ventures is a German Venture Capital Enterprise created by founders for founders. The main focus of Shortcut Ventures investment strategy is on international startups specializing in the fields of Internet, Mobile, Games, and Social Media. The company mainly invests in startups that are in the early growth stages. Along with the financial support, firms in the portfolio are also provided with access to founder knowledge and know-how. Shortcut Ventures is managed by Dirk Freise, Martin Ostermayer, and Thorsten...