SumUp has secured $160 million to expand liquidity for Brazil’s smallest merchants at a time when tight credit is squeezing cash flows. The financing arrives through two newly issued Investment Funds in Credit Rights, giving the company fresh capacity to advance receivables tied to card sales. Management frames the raise as a step change in its local funding strategy and a direct response to rising demand for instant settlement.
Funding Details
The issuance is split between the FIDC SumUp Smart I at $85 million and the FIDC SumUp Smart II at $75 million. Both vehicles are backed by credit card receivables, aligning investor returns with the performance and duration of merchants’ installment payments. Bradesco BBI led the coordination, with Itaú BBA as coordinator, Bem DTVM as administrator, and Bradesco Asset as manager.
Market Context and Rationale
Micro and small businesses have been hit hardest by Brazil’s high interest rates, with many relying on receivables advances to keep operating. SumUp says demand for immediate liquidity has climbed, particularly for near real time access to funds after a sale. “Our client needs to sell today and receive now, sometimes in 30 minutes, and we must be ready for that,” said Lilian Parola, SumUp’s Director of Capital Markets and Treasury for Latin America.
Structure of the FIDCs
Segmentation into two funds separates risk profiles to match investor preference and streamline pricing. Some investors want exposure only to receivables settled through Brazil’s largest banks, while others accept receivables tied to smaller institutions. Keeping distinct pools simplifies risk assessment and reduces friction in the allocation process, according to Parola.
Evolving Funding Strategy
SumUp became a full acquirer in 2021 after operating as a subacquirer of Cielo, then steadily shifted toward capital markets funding. The company says it has executed seven FIDC operations over the past five years and broadened its counterparties to avoid reliance on any single source. Lessons from the pandemic informed this diversification, balancing cost, predictability, and stability.
Economics and Tradeoffs
Parola acknowledges that FIDCs can be a higher cost channel than certain alternatives, but they offer fixed terms, transparent pricing, and access to a wider investor base. That mix delivers funding continuity in volatile cycles, which is vital when merchant cash needs spike. The goal is equilibrium between cost of funds and the resilience required to serve millions of small sellers.
Use of Proceeds and Impact
Proceeds will primarily bolster receivables advances and instant payout features for SumUp’s core customer base of individual entrepreneurs, MEIs, and small shop owners. Accelerating the transfer of sales helps merchants smooth cash flow, restock inventory, and cover operating expenses without taking on traditional debt. “By accelerating settlement, we help clients maintain balanced cash positions and keep their businesses running,” Parola said.
Institutional Backing and Track Record
The company notes additional support across its funding history, including a $44 million commitment from BNDES directed to microcredit initiatives. Management says cumulative capital markets activity since 2021 exceeds $440 million when including prior FIDC issuances. This record underpins investor confidence in the performance of the receivables pool and the underwriting framework.
Company Background
SumUp operates in 36 countries and serves more than 4 million micro and small businesses worldwide. In Brazil since 2013, the fintech employs about 950 people and focuses on financial inclusion through payments, digital accounts, and tools for business management. The company’s pitch centers on simple onboarding, affordable acceptance, and faster access to proceeds.
With two new FIDCs totaling $160 million, SumUp is doubling down on instant settlement and receivables financing for Brazil’s smallest merchants. The structure reflects a pragmatic balance between investor risk appetite and predictable funding for an expanding user base. If execution matches demand, the program should give micro-entrepreneurs sharper liquidity tools while reinforcing SumUp’s capital markets playbook.