Checkout.com Secures $450M Funding, Valuation Hits $15 Billion

Checkout.com, a prominent payments provider, has secured additional funding. The company has successfully completed a $450 million Series C investment round, led by Tiger Global Management, with participation from Greenoaks Capital and its current investor base.

For those unfamiliar, Checkout.com aims to provide a comprehensive platform for all payment-related needs, encompassing transaction acceptance, processing, and fraud prevention. The company concentrates on serving larger businesses, offering a highly adaptable product designed for seamless integration as a core infrastructure component.

The company’s financial journey is particularly noteworthy. Founded in London in 2012, Checkout.com initially experienced steady, incremental growth. The company strategically used revenue to fund expansion, adding personnel as resources allowed. Founder and CEO Guillaume Pousaz recalled during a TechCrunch Disrupt appearance that early growth meant being able to add just one or two employees each month.

However, Checkout.com continued to expand rapidly, eventually securing one of the largest Series A funding rounds ever seen for a European firm – $230 million at a $2 billion valuation. A year later, the company further bolstered its finances with an additional $150 million investment, bringing its valuation to $5.5 billion.

This latest funding round values Checkout.com at $15 billion, positioning it as the fourth-largest fintech company worldwide, according to the company itself.

Checkout.com’s workforce grew significantly from 440 employees in January 2020 to 940 by the end of that year. The company anticipates adding another 700 employees in the current year.

While not strictly necessary for survival, Pousaz explains that venture capital backing provides a valuable form of endorsement. Having support from firms like Insight, DST, Coatue, and Tiger Global Management enhances the company’s credibility when engaging with potential large-scale clients.

Furthermore, substantial financial reserves are crucial for expanding into new international markets. Pousaz stated in December that the company processes billions of dollars weekly, leading to significant cash flow and necessitating strong capitalization to meet regulatory requirements.

The company’s financial structure is complex, as Checkout.com is regulated in multiple jurisdictions, including the U.K., France, Brazil, Singapore, and Hong Kong, with plans to add India and the Philippines. Obtaining licenses in these regions requires maintaining sufficient funds within the local market, regardless of overall financial strength elsewhere. This makes raising capital a strategic advantage.

Investors are drawn to the company’s clear visibility into future performance. Pousaz explained that Checkout.com can provide investors with a detailed view of its sales pipeline and prospective customers. Forecasting based on this pipeline allows for accurate projections of future revenue.

“For example, I can confidently state that we anticipate at least 80% growth in 2021,” he noted, adding that this projection is based solely on clients currently implementing Checkout.com’s services. The company experienced a threefold increase in payment processing volume in 2020 compared to 2019.

Checkout.com operates with a financial approach similar to that of a publicly traded company. While not yet generating substantial EBITDA, the company is profitable and prioritizes reinvesting a significant portion of its revenue back into the business. “We are generating double-digit millions in EBITDA, though not $50 million,” Pousaz clarified.

The funds from this latest investment round will be used to establish two new offices in the United States, complementing the existing San Francisco location with offices in New York and Denver.