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SumUp, which helps businesses take card payments, raises $895M to double down on growth

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SumUp, a London-based startup that helps businesses power revenues through card payments — by way of physical readers, online payments and invoices — is itself powering up in a big way. Today it announced funding of €750 million (around $895 million at today’s rates), money that it will be using to continue expanding its business — specifically, for acquisitions; to launch in new markets in Europe, Latin America and Asia; and to build out the suite of services that it provides to businesses. The company is already active in 33 countries (most recently Chile, Colombia, and Romania) and has some 3 million businesses as customers.

The funding is coming from Goldman Sachs, Temasek, Bain Capital Credit, Crestline, and funds managed by Oaktree Capital Management. SumUp confirmed that the financing is coming in the form of debt, not equity, so there is no formal valuation of the company to disclose. To date, it’s one of the biggest financings, debt or otherwise, for any startup (that is, any privately-backed tech company) in the region.

Notably, Goldman Sachs and Bain Capital led a $371 million round of debt for the company in 2019.

Marc-Alexander Christ, one of SumUp’s co-founders (the company does not seem to use formal titles like “CEO”), said that the company opted for debt over equity because it could.

“We have very stable cash flow, which allows us to take on take on debt,” he said in an interview. Debt is often a route taken by bigger, scaled up companies, especially those generating a lot of cash. No dilution also means the cost of capital is lower, too.

The company got its start back in 2012 as one of a wave of so-called Square “clones” — companies being founded in and mostly outside of the U.S. basing their service around small card payment dongles that attached to phones or tablets and targeting businesses that were either not yet accepting card payments because they were too expensive or complicated, or were using costly traditional alternatives from banks.

As with Square, iZettle (eventually acquired by PayPal) and many others in the space, over time SumUp diversified into a range of other card- and payment-related services for business, including online transactions, invoicing, gift cards and wider point-of-sale solutions.

It’s also emerged as something of a consolidator in the space: in 2016 it acquired one of its bigger competitors, the Rocket Internet-backed Payleven, which helped expand its footprint to a wider set of markets. Over the years, it’s picked up a number of other startups, including most recently the business-focused mobile banking platform Paysolut in Lithuania, as well as Goodtill and Tiller to expand into point-of-sale for bigger venues.

Those deals also speak to how SumUp is approaching its product expansion strategy. The company’s business model is predicated primarily on taking a cut of transactions made on its platform, and so for now, its strategy is about more services for businesses and scaling up that rate of transactions, not a move into more financial services for consumers.

That is in contrast to companies like Square, which has picked up more than 7 million consumer customers to date by way of Square Cash; or iZettle, which never directly launched services for consumers but was acquired by one of the biggest consumer-facing digital wallet companies, PayPal.

Nor is SumUp interested in cryptocurrency, another area where the other two have been active.

“Square has had one of the easier onboarding experiences when it comes to making Bitcoin investments,” Christ said. “But it’s mainly a customer acquisition tool. They make some money on Bitcoin but not a lot. So I don’t think we will get to that space super soon because it doesn’t represent value for customers. It engages users logging in just to check their accounts but not doing anything else.”

That focus has not just helped the company steadily grow at a time when more transactions are moving online and away from cash — two trends giving a major fillip by the Covid-19 pandemic, which forced stores to close in many countries, made people more reluctant to shop in person, and got everyone using cash less to contain community transmission — but it also helped it attract this funding.

“We’re proud to be backing SumUp once again and we recognise the truly impressive strides made by the company over the past couple of years. We have huge admiration for what SumUp is doing for small businesses across the world in helping them to keep trading and flourishing in some of the most trying economic circumstances imaginable,” said Tom Maughan of Bain Capital Credit in a statement. “The doubling down of our investment in SumUp in this round is both a demonstration of our confidence in the company today and its strong future.”

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Brazil’s Divibank raises millions to become the Clearbanc of LatAm

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Divibank, a financing platform offering LatAm businesses access to growth capital, has closed on a $3.6 million round of seed funding led by San Francisco-based Better Tomorrow Ventures (BTV).

São Paulo-based Divibank was founded in March 2020, right as the COVID-pandemic was starting. The company has built a data-driven financing platform aimed at giving businesses access to non-dilutive capital to finance their growth via revenue-share financing.

“We are changing the way entrepreneurs scale their online businesses by providing quick and affordable capital to startups and SMEs in Latin America,” said co-founder and CEO Jaime Taboada. In particular, Divibank is targeting e-commerce and SaaS companies although it also counts edtechs, fintechs and marketplaces among its clients.

The company is now also offering marketing analytics software for its clients so they can “get more value out of the capital they receive.”

A slew of other investors participated in the round, including existing backer MAYA Capital and new investors such as Village Global, Clocktower Ventures, Magma Partners, Gilgamesh Ventures, Rally Cap Ventures and Alumni Ventures Group. A group of high-profile angel investors also put money in the round, including Rappi founder and president Sebastian Mejia, Tayo Oviosu (founder/CEO of Paga, who participated via Kairos Angels), Ramp founder and CTO Karim Atiyeh and Bread founders Josh Abramowitz and Daniel Simon.

In just over a year’s time, Divibank has seen some impressive growth (albeit from a small base). In the past six months alone, the company said it has signed on over 50 new clients; seen its total loan issuance volume increase by 7x; revenues climb by 5x; customer base increase by 11x and employee base by 4x. Customers include Dr. Jones, CapaCard and Foodz, among others.

“Traditional banks and financial institutions do not know how to evaluate internet businesses, so they generally do not offer loans to these companies. If they do, it is generally a long and tedious process at a very high cost,” Taboada said. “With our revenue-share offering, the entrepreneur does not have to pledge his home, drown in credit card debts or even give up his equity to invest in marketing and growth.”

For now, Divibank is focused on Brazil, considering the country is huge and has more than 11 million SMEs “with many growth opportunities to explore,” according to Taboada. It’s looking to expand to the rest of LatAm and other emerging markets in the future, but no timeline has yet been set.

As in many other sectors, the COVID-19 pandemic served as a tailwind to Divibank’s business, considering it accelerated the digitalization of everything globally.

“We founded Divibank the same week as the lockdown started in Brazil, and we saw many industries that didn’t traditionally advertise online migrate to Google and Facebook Ads rapidly,” Taboada told TechCrunch. “This obviously helped our thesis a lot, as many of our clients had actually recently went from only selling offline to selling mostly online. And there’s no better way to attract new clients online than with digital ads.”

Divibank will use its new capital to accelerate its product roadmap, scale its go-to-market strategy and ramp up hiring. Specifically, it will invest more aggressively in engineering/tech, sales, marketing, credit risk and operations. Today the team consists of eight employees in Brazil, and that number will likely grow to more than 25 or 30 in the coming 12 months, according to Taboada.

The startup is also developing what it describes as “value additive” software, aimed at helping clients better manage their digital ads campaigns and “optimize their investment returns.”

Looking ahead, Divibank is working on a few additional financial products for its clients, targeting the more than $205 billion e-commerce and SaaS markets in Latin America with offerings such as inventory financing and recurring revenue securitizations. Specifically, it plans to continue developing its banking tech platform by “automating the whole credit process,” developing its analytics platform and building its data science/ML capabilities to improve its credit model.

Jake Gibson, general partner at Better Tomorrow Ventures, noted that his firm is also an investor in Clearbanc, which also provided non-dilutive financing for founders. The company’s “20-minute term sheet” product, perhaps its most well-known in tech, allowed e-commerce companies to raise non-dilutive marketing growth capital between $10,000 to $10 million based on its revenue and ad spend.

“We are very bullish on the idea that not every company should be funded with venture dollars, and that lack of funding options can keep too many would-be entrepreneurs out of the market,” he said. “Combine that with the growth of e-commerce in Brazil and LatAm, and expected acceleration fueled by COVID, and the opportunity to build something meaningful seemed obvious.”

Also, since there aren’t a lot of similar offerings in the region, Better Tomorrow views the space that Divibank is addressing as a “massive untapped market.”

Besides Clearbanc, Divibank is also similar to another U.S.-based fintech, Pipe, in that both companies aim to help clients with SaaS, subscription and other recurring revenue models with new types of financings that can help them grow without dilution.

“Like the e-commerce market, we see the SaaS, and the recurring revenues markets in general, growing rapidly,” Taboada said.

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Orbite offers a five-star ‘space camp’ for would-be space travelers

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As private companies like Axiom Space, Blue Origin, Virgin Galactic and SpaceX prepare to ferry private customers to the stars, a whole new market is opening up to train affluent would-be travelers for their future missions. Case in point: space training company Orbite, whose goal is to combine aeronautics and five-star hospitality in its inaugural astronaut training program.

“We’re going to have hundreds, if not thousands of people this decade of the 2020s, who will go to space, but you just don’t get off the couch and strap into a rocket […] you actually have to get mentally prepared, physically prepared, and also spiritually prepared for this out of out of this world journey,” co-founder Jason Andrews told TechCrunch. “And that’s really our role.”

Orbite (the French word for ‘orbit,’ pronounced or-beet) was founded by space and hospitality industry veterans Andrews and Nicolas Gaume. Andrews is an aerospace entrepreneur that founded Spaceflight and BlackSky, while Gaume, a software and game development entrepreneur, sits on the board of his family’s resort and hotel business Groupe Gaume. Last year, Gaume’s business Space Cargo Unlimited shipped a dozen bottles of wine to the International Space Station. They were later retrieved. (When asked how the wine tasted, Gaume told TechCrunch, “It’s a unique product.”)

The program will be led by Brienna Rommes, who previously worked as the director of space training and research at the National Aerospace Training and Research Center. Rommes has trained over 600 people to prepare for spaceflight, including Sir Richard Branson, Orbite said.

Led by Rommes, the program aim to prepare travelers that are determined to reach space, but Andrews also said Orbite can help customers “try before they buy” – give people a taste of spaceflight for those who are unsure whether they’d actually want to board a launch vehicle. This seems to be their main value proposition, by providing a general overview to space travel across different companies, because they’ll also be competing to a degree with the native (and mandatory) training programs of individual private launch companies that are purpose-built to prepare customers for their flight.

Costs remain prohibitively high for the average spacefarer: it’s been reported that a ticket on Axiom’s inaugural commercial launch to the International Space Station costs upwards of $55 million. Orbite’s premium training program comes in at $29,500 per person for the three-day, four-night stay.

In acknowledgement on the premium price tag, the four training program sessions scheduled through the remainder of 2021 will be held at luxury resorts: the Four Seasons Resort in Orlando, Florida, and Hôtel La Co(o)rniche in Pyla-sur-Mer, France. The latter hotel is owned by Groupe Gaume.

Would-be space travelers will be able to experience up to 5 Gs by taking a ride on a high-performance aircraft as well as simulated zero-gravity. To prepare customers mentally and even spiritually, the training program itinerary includes meditation training, a workshop on stress and anxiety management, and individual coaching with staff “to explore personal goals for space, thoughts and asses possible flight options,” the company said. The itinerary also includes virtual reality mission experiences and a ‘Michelin star’ space food tasting.

“We really want to make sure we bridge the gap with more of a sensorial, psychological, even spiritual preparation for the trip,” Gaume said.

The company’s long-term vision is building and operating many training facilities around the world. The first facility will open in 2023 or 2024, though Andrews and Gaume are not yet sharing where it will be located. They did say that the dedicated training facility will offer a range of packages, with some as short as single-day experiences. They will also offer accommodation and hospitality, potentially for the long term – weeks or even months, depending on if we reach a stage in human space travel where we’re sending private citizens to the Moon or even Mars.

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Treasury Prime raises $20M to scale its banking-as-a-service biz

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This morning Treasury Prime, a banking-as-a-service startup that delivers its product via APIs, announced that it has closed a $20 million Series B. The capital comes around a year since the startup announced its Series A, and around 1.5 years since it raised its preceding round.

For Treasury Prime, the new capital was an internal affair, with prior investors stepping up to lead its new round of funding. Deciens Capital and QED Investors co-led the round, with Susa Ventures and SaaStr Fund also putting cash into the transaction.

As is increasingly common among insider-led fundraises in recent years, the startup in question was not in dire need of new funding before the new investment came together. In fact, Treasury Prime CEO Chris Dean told TechCrunch that his firm is “super capital efficient” in an interview, adding that it had not tucked into its Series A capital until January of this year.

So, why raise more funds now? To invest aggressively in its business. That plan is cliche for a startup raising new funding, but in the case of Treasury Prime the move isn’t in anticipation of future demand. Dean told TechCrunch that his startups had run into a bottleneck in which it could only take on so much new customer volume. That’s no good for a startup in a competitive sector, so picking up its spend in early 2021 and raising new capital in mid-2021 makes sense as it could help it hire, and absorb more demand, more quickly.

And for Treasury Prime’s preceding backers, the chance to put more capital into a startup that was dealing with more demand than capacity likely wasn’t too hard a choice.  Dean added that to make sure the round’s price was market-reasonable, he pitched around 10 venture capital firms, got three term sheets, and then went with his preceding investor group; if any VC reading this is irked by the move, this is the founder equivalent of private-market investors asking founders to come back to them after they find a lead.

But with the banking-as-a-service market growing, thanks to entrants like Stripe showing up in recent quarters, how does Treasury Prime expect to stay towards the front of its fintech niche? Per Dean, by bringing together banks that want fintech deal volume, and fintechs who need both technology and eventual banking partners. By courting both sides of its market, Treasury Prime hopes to be well-situated for long-term growth.

And its CEO is bullish on the scale of his market.

If you imagine the banking-as-a-service market as merely neobanks, he explained, it’s not that big. But his startup expects the number of companies that want to offer their customers the sort banking capabilities that Treasury Prime and some competitors can offer will be broad. How broad? The best way I can summarize the company’s argument is that, a bit like how vertical SaaS has proven that building software for particular industries can be big business, Treasury Prime expects that banking tools will also be built for similar business categories. Vertical banking, perhaps, integrated into other services.

And it wants to be there, offering the back-end tech, and access to banks that the companies building those services will need.

Fintech is a big and expensive market, and Treasury Prime isn’t busy raising nine-figure rounds — yet, at least. According to PitchBook data, Treasury Prime was valued at just over $40 million at the time of its Series A; the company’s new valuation was presumably higher, though how much is not yet clear.

Let’s see how far it can get with $20 million more as it sheds some of its frugal DNA and looks to burn a little faster.

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