NomuPay — the payments startup that was formed out of some of the healthier pieces of the dramatically failed fintech Wirecard — has made an acquisition as it continues on its trajectory of better economies of scale. It has picked up Total Processing, a startup out of Manchester that builds payment processing solutions for functions like recurring payments, risk management, PCI (data security) compliance and payment integrations.
NomuPay is paying around $35 million for Total Processing, and says that the total value of the company is now $135 million.
For some context on that number, Total Processing appears not to have disclosed any outside funding since being founded in 2015.
Dublin-based NomuPay announced earlier this year that it had raised $53.6 million in funding, and PitchBook estimated that the startup was valued at just under $172 million in September 2022. NomuPay says PitchBook’s estimate is inaccurate and that “valuation has consistently been on the up,” according to NomuPay’s CEO Peter Burridge.
That is an important point, given how many down-rounds and write downs there have been in the tech industry in the last year.
NomuPay up to now has been focusing on acquiring or buying licenses to manage payments in Southeast Asia, Europe, Turkey and longer term the Middle East. But Burridge told TechCrunch that he sees Total Processing as an opportunity to add in more tooling around that basic payments feature, as well as customer services for its business users.
“No one drives a car without a spare tire,” he said of the deal and how it widens the funnel for what NomuPay can offer to its customers. “The value proposition is that Total Processing has this tech stack that is all about solving merchant pain. And it’s a consultative sell as well. You will never get an answer from a real person at Stripe or Adyen. You don’t talk to anyone.”
The plan will be to continue scaling Total Processing now to expand into more markets, starting with Hong Kong and Southeast Asia. Total Processing itself was most active in the UK and United Arab Emirates and so NomuPay will be leveraging that to expand its own footprint. Neither company has disclosed how many customers they have, nor turnover (that is, revenues).
M&A is coming up as a very viable option for a number of startups that might have interesting underlying business and technology, but are struggling to close rounds at terms that make sense to them yet might need more runway to operate or grow. It’s a buyers and backers market right now.
Consolidation also has been a longstanding theme in fintech that precedes the current funding downturn. Margins remain thin for many digital payments services — not least because of the many stakeholders involved looking for a cut — and so combining forces for better economies of scale over wider geographies, or by offering a fuller stack of services to customers, is a no-brainer.