It seems as if the European fintech market is entering a phase of consolidation. Earlier today the mobile payment companies SumUp and payleven announced a merger agreement. A few hours later we learned that the Munich-based fintech startup Paymill seems to be in trouble, as it has just entered into a “strategic” insolvency. Like payleven, Paymill has been heavily backed from the beginning by Rocket Internet. The Berlin-based company builder seems to have bad luck currently – especially in the fintech industry.
Founded in 2012, the online payments provider Paymill raised a total of roughly €18 million in venture capital from Rocket Internet, Sunstone Capital, Blumberg Capital and Holtzbrinck Ventures. Rocket Internet and the other investors haven’t officially commented on Paymills current problems yet, but it seems as if they were not interested to provide Paymill with further capital.
I just had a call with Paymill founder Mark Henkel, who explained that the current problems were caused by an acquistion which almost happened but was canceled after a lot of time was already invested into discussions and due diligence. Another reason for the current situation is that it took longer as expected to get a bank license for Paymill, which you need if you want to operate a online payments service at the scale of Paymill.
According to Mark Henkel, there where no layoffs related to the current situation of the company, and there are also no layoffs planned. Paymill currently employs about 60 people. The strategic insolvency provides the company with a little bit of extra time, which Mark and his team are now using to speaking with potential acquirers. Paymill also just extended the team with the new CEO Vincenz von Braun, who is a lawyer and restructuring expert. In a statement which was published by our colleagues at Gruenderszene.de, von Braun mentioned that he sees the probability of a successful sale within the next two months by 50%.
During my conversation with Mark, he mentioned that he is still very hopefull and is willing to fight together with his team and with the support of Paymills loyal customers. Paymill’s payments solution is used by Freeletics, Flixbus, Doodle and other big brands.
We hope that there will be an exit or some other kind of last resort for Paymill and its 60 employess. We’ll keep you updated.