Low profile London payments fintech Checkout.com set a new European record for a Series A funding round this week as it closed $230 million at a valuation of around $2 billion. It’s the latest vindication that the UK and its capital’s fintech scene has become the global hotbed for exciting new financial services companies. No other fintech in Europe has ever raised so much at such an early stage.
Having been founded in 2012, Checkout.com is seven years old and hasn’t followed a traditional path for a tech start-up. This week’s investment raise marks the first time that the fintech has brought outside investment in to the company.
Founder and CEO Guillaume Pousaz made the initial investment to get Checkout.com off the ground and until now has been the sole shareholder in the company. He has pursued steady, organic growth, targeting 50% revenue growth per year – a target that has now been met for five straight years. Pousaz says 10 years of 50% annual growth is his next aim.
$46.7 million in revenues was recorded in 2017, based on information available through Companies House – 56% more than 2016 revenues. Profits were $23.9 million, representing a gross profit margin of 51%. Mr Pousaz has managed to build a very high margin business, stating that “more than that and you get punished” in relation to his company’s gross profits.
Within that context, it’s perhaps not surprising how much investment Checkout.com has managed to raise at its first time of asking. Existing clients include Adidas, Samsung, Deliveroo and fellow London fintech TransferWise.
So what does Checkout.com actually do? The company sits between merchants, the businesses taking payment from clients, and payments providers such as Visa, Mastercard or Apple Pay. Using Checkout means merchants can accept a wider range of payment methods such as pretty much all credit and debit card payments providers as well as the newer breed of online payments providers such as PayPal and Sofort and popular regional alternatives. The platform also allows merchants to process and settle payments in pretty much any currency.
Checkout.com also offers its users access to payments analytics software as well as offering very high level security functionalities and level of stability that has won praise from users.
In many ways Checkout.com is very similar to Adyen, a competitor from the Netherlands that last June listed on the Amsterdam Euronext stock exchange. Its share price has gained 70% since. It’s a comparison Mr Pousaz embraces, saying
“we’re the next Adyen” and “we do the same thing as Adyen, share the same clients”.
If Checkout.com manages to maintain its current trajectory it won’t be long before it too may be considering a stock market listing.