SumUp’s $15 Billion Question: London or New York?

You know a fintech has grown up when the question shifts from “How many cafés use their card readers?” to “Which stock exchange wants them?” That’s where SumUp now finds itself. Born in 2012 with a pocket-sized card reader for tiny shops, it has since done some serious bulking – today it’s a payments and financial services heavyweight with over four million merchants in 35 countries. What started as a dongle in your pocket is now a bundle of business accounts, e-commerce, lending and invoicing – the sort of services high street banks once guarded like the family silver.

Now reports suggest the company is eyeing up an IPO worth somewhere between $10 and $15 billion. The big decision: list in London, with regulators it already knows, or head to New York for the bright lights and deeper pockets? On paper it’s about geography. In reality it’s about valuation, investor appetite and how much legal red tape the company is willing to handle.

Following the Money

SumUp hasn’t exactly been short of backers. Bain Capital and friends poured in €590 million in 2022, valuing the business at €8 billion. More recently, it borrowed over €1 billion from the private debts markets to keep merchant loans and expansion rolling.

That’s the thing with payments: the apps look slick and simple, but behind the curtain there’s a small army of lawyers, compliance officers and IT engineers who all need paying. An IPO would clear some of the debt, put some meat on the balance sheet bones, and fund the next growth spurt.

The snag? SumUp isn’t alone on the dancefloor. Stripe and Adyen have long been the cool kids, Square (now Block) has scale on its side, and even high street banks have stirred from their slumber – rolling out slick apps and online lending tools that look suspiciously like the things fintechs used to have all to themselves. SumUp now must convince investors that it can grow and stand out in a crowd that keeps getting noisier.

London or New York?

London offers familiar turf and a government keen to prove the City is still open to fintech business. The problem is that IPOs here have been thin on the ground, and big names have gone elsewhere – most notably ARM, the Cambridge-based chip designer behind most of the world’s smartphone tech, which chose to float in New York rather than return to London.

New York, meanwhile, hardly needs the sales pitch. It offers deeper pools of capital and investors more willing to back fast-growing, not-yet-profitable tech firms. But it comes with heavier disclosure rules, US GAAP accounting, and a litigation culture where class actions are treated almost like a national pastime.

It’s no wonder SumUp is keeping its options open.

The Legal and Regulatory Layer

Whichever market SumUp picks, the lawyers will be busy. The company already jumps through hoops in three regions: UK (regulated by the FCA), EU (payments and anti-money-laundering rules), and US (a patchwork of state licences). Listing won’t simplify that – it just means spelling it all out in a prospectus thick enough to wedge a door open.

The key headaches are proving its services meet financial rules, keeping customer data safe under GDPR, and juggling consumer-protection standards that vary wildly by country. Investors will also care about governance – who sits on the board, what rights small shareholders have, and how much control the founders keep. In London, that means following (or justifying departures from) the UK Corporate Governance Code; in New York, it’s stricter stock-exchange rules on independent directors and committees.

Tax adds another wrinkle: global fintechs often report profits in whichever country gives them the best deal, and investors will want to know how that plays out. How SumUp structures itself internationally – which parts of the group pocket the profits, where the taxman gets paid, and how regulators react – will be closely watched once it’s in the public eye.

Risks and Challenges

The IPO pitch rests on SumUp’s ability to keep growing in a crowded market. But there are plenty of other hazards too. Small merchants – its bread and butter – are often the first to feel the pinch when the economy slows, which makes revenues volatile. Rising interest rates don’t help either, curbing consumer spending and squeezing borrowers.

Then there’s regulation. Authorities are stepping up scrutiny on anti-money-laundering checks and consumer protection, while data security is the bogeyman of every fintech prospectus. Investors will want to know how SumUp plans to stay ahead of both hackers and regulators without burning through cash.

And looming over it all are the ghosts of fintech IPOs past. Wise, the London-based money transfer company, had an underwhelming debut in the City, while Robinhood, the US trading app made famous by the GameStop saga, has had a turbulent run in New York. Neither lived up to their billing, and investors haven’t forgotten. SumUp’s challenge is to persuade the market that it won’t be the next cautionary tale.

The Last Word

For SumUp, this isn’t just about choosing a stock market and cutting the ribbon. London would let it claim the role of Europe’s homegrown champion; New York promises bigger valuations but a heavier rulebook. Either way, the decision will shape not just how much money it raises, but how the company is perceived.

Investors will see it as a test case for European fintech. A smooth listing could restore some faith that payments firms can thrive in public markets. A rocky one would only deepen the scepticism already hanging over the sector.

Take away the apps and card readers, and the fundamental questions remain the same as ever: where to list, under whose rules, and at what price.