Checkout.com says crypto and adult content are not a significant part of its portfolio as it eyes full-year profitability and expansion this year, even while its UK entities incur losses.
Founded by Guillaume Pousaz in 2012, Checkout grew rapidly as the post-pandemic ecommerce boom heralded a growing need for processing online payments. In 2022, after raising $1bn from Tiger Global and the Qatar Investment Authority, the company’s valuation soared to $40bn.
But within 18 months, that figure had been repeatedly slashed, with an internal valuation in June 2023 pricing Checkout.com at $9.4bn, a quarter of its peak.
At the tail end of last year, Sifted reported that losses at its UK entities ballooned to 73% to $306m in 2023. Colbeci says that the UK filings are not indicative of the company’s global business performance and claims the company is on track to hit full-year profitability this year.
Meron Colbeci, the UK fintech’s chief product officer, says that Checkout is now focusing on ecommerce companies and fintechs over riskier clientele.
In its 2023 results for its UK entities, Checkout’s revenue from processing transactions also dipped by 13% from $246m in 2022 to $212m after it severed ties with “a large merchant”, understood as crypto exchange Binance.
Colbeci declined to share any specific details on its client base but did admit the fintech has stopped targeting certain businesses.
“As any payment provider, there are merchants that stop being compliant, there are merchants that are too risky and there are merchants that become insolvent,” he says. “There’s a natural process of offboarding those types of merchants.”
Changing clients
Checkout has a complex company structure. While it files financial reports for its two entities in the UK (Checkout LTD and Checkout Technology Ltd), its parent company is domiciled in Jersey. The company also doesn’t publish its global group accounts.
Previous coverage of the fintech has suggested that Checkout’s rapid rise came from processing payments for companies seen as too risky by other payment processors. OnlyFans was among its top 10 accounts in 2022, the FT reported citing people familiar with the fintech’s business.
“As far as I know OnlyFans is not currently on our platform,” Colbeci says. “The adult industry is a very minuscule part of our overall portfolio.”
And in regards to crypto, he says it’s “under 5% of its overall volume”, with 95% coming from ecommerce and fintechs. The top 10 accounts on Checkout’s books represent just 18% of its revenue and added more than 300 merchants to its platform in 2024 including Ticketmaster and Bumble.
Expansion plans
Colbeci claims Checkout is targeting full-year profitability for this year and is also in the process of expanding to new geographies.
The company currently offers its payment services to companies based in the UK, Europe and Middle East and North Africa regions as well as the US. Last year, Checkout expanded to Japan where Colbeci says it has “a very famous and big merchant platform on its books”. It’s also currently onboarding merchants in Canada and is set to roll out in Brazil by the end of the year.
But unlike other fintechs in the UK and across Europe, it’s not looking to IPO anytime soon and is instead focused on hitting its profitability goals.
“We currently don’t have any plans to go to IPO,” he says. “We’re 100% focused on serving our merchants, growing the business and generating profitability.”
Read the orginal article: https://sifted.eu/articles/checkout-profitability-news/
