’s crypto bet: how Europe’s most valuable startup lost its crown | Popgen Tech


Guillaume Pousaz used to run Europe’s most valuable company.

But this year, and after a gamble on crypto backfired, the 41-year-old CEO has had to watch’s valuation collapse.

A fierce competitor, from his days as a youth snowboarder to October’s Iron Man competition in Utah, Pousaz must now fight if he wants his company to regain its crown.

Pousaz founded Checkout in 2012 as a technology-focused payment processing company. The London-based startup has grown rapidly on the back of a boom in e-commerce deals, hitting a $40 billion valuation in January after raising money from investors such as Tiger Global and Qatar Investment Authority.

However, Checkout told employees last month that it was lowering its intrinsic valuation — as opposed to the price paid by investors — to just $11 billion. It reduced the exercise price for employee stock options by 74 percent, reflecting a broader plunge in technology markets over the past year.

The company’s investors, lured by the $2 billion payments market, continued to hit back at Pousaz as the competitor was determined enough to disrupt both established rivals like Worldpay and Fiserv, as well as take on relative newcomers like Stripe and Adyen.

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Checkout’s revenue grew from $46.8 million in 2017 to $252.7 million in 2020, the most recent year for which accounts are publicly available in the UK © Eva Marie Uzcategui/Bloomberg

“I couldn’t keep up with him skiing, I couldn’t keep up with him running, I couldn’t keep up with him in any athletic endeavor,” said Deven Parekh, managing director at Insight Partners and a Checkout- Board member. “There are probably very few CEOs who work as hard as he does.”

Pousaz, who grew up in Geneva, was raised by his mother after his parents divorced in the late 1990s. The separation left his family in dire financial straits, an experience that people who work with Pousaz say still drives him.

In 2005, he dropped out of university in his final year and moved to California to go surfing. It was in the US that he first started working in the payments industry, before embarking on an entrepreneurial journey through Mauritius and Singapore that led to the founding of Checkout in London.

With the business already profitable, Pousaz fended off venture capitalists and even multibillion-dollar acquisition offers for years. That left him with much tighter control of the company than most startup founders: his stake is about 60 percent, according to registration documents for Checkout’s parent company, which is domiciled in Jersey.

Pousaz first raised venture dollars in 2019. Ophelia Brown, founder of tech investor Blossom Capital, stepped up to invest in the initial deal after tracking the company for several years through filings with the UK’s Companies House registry. “The performance was just exceptional,” she said, describing Pousaz as “a bit intense, but in a good way”.

“That’s all he does, 18 hours a day,” added another person who worked closely with Pousaz. “Investors love it, but employees, maybe not. He pushes people very hard.”

Pousaz was fortunate that Checkout expanded amid a growing need for payment processing, but it also made a strategic choice to partner with fast-growing new sectors, such as neobanks like Revolut.

“A key factor to Checkout’s success has been building the right products at the right time,” said Tom Stafford, another board member and managing partner at DST Global. “He identified relatively early on that fintech was going to be a big sector.”

However, Pousaz’s bet on digital assets was less successful. As recently as last year, Binance was the company’s top trader by net revenue while was another top client, according to people familiar with the matter. Checkout declined to comment on specific customers, but said crypto and fintech customers made up as much as half of its payment volumes last year.

However, crypto exchanges including Binance saw significant investor outflows after FTX collapsed in November.

“We’ve been a long-time partner of the crypto industry, so we’ve seen ups and downs,” Checkout’s CFO Céline Dufétel told the Financial Times. “I wouldn’t say that we expected exactly how much volatility has occurred over the course of this year.”

Along with more established clients such as J Sainsbury, Sony Electronics and Frasers Group, Checkout has done business with the kind of clients that other payment processors don’t, including Pornhub’s owner MindGeek. OnlyFans was among its top 10 accounts as recently as this year, according to people familiar with the business.

Adult content made up less than 15 percent of Checkout’s revenue by the time it raised its 2020 funding round, one investor said. The company said that volumes and returns from the category were “always immaterial” and that it severed any remaining ties to the mature sector earlier this year.

Checkout employees’ willingness to go where its competitors have not continues to test ethical boundaries. During the early days of Russia’s invasion of Ukraine, a senior commercial manager urged employees to contact prospective clients with significant Russian business as other payments firms cut such lines, according to an internal message seen by the FT.

Pousaz, third from left, with other executives, including CFO Céline Dufétel, fourth from left
Pousaz, third from left, with other executives, including CFO Céline Dufétel, fourth from left

Checkout said it condemned the message, but added that it could not control the actions of every employee. Checkout “ends Visa and Mastercard processing [in Russian roubles] before even Visa and Mastercard cut ties themselves”, the company said. It added that it complies with international sanctions.

Dufétel, who also serves as chief operating officer, joined in 2021 after working in the C-suite at 85-year-old asset manager T Rowe Price. She said that part of her role at Checkout was to “put in place the structure and the processes that you need when you start to get to that scale”.

The company’s compliance processes were scrutinized by French regulator ACPR as part of a routine investigation this year, according to people familiar with the matter. The agency has raised concerns about staffing levels in its compliance department. The ACPR declined to comment. Checkout said it was “proactively and fully” engaging with “all relevant regulators.”

Working in a highly regulated industry hasn’t stopped Checkout from moving quickly. Its revenue grew from $46.8 million in 2017 to $252.7 million in 2020, the most recent year for which accounts are publicly available in the UK. Checkout said the figures on Companies House were not representative of its entire business.

This year’s fundraising fueled a push into the U.S. market, which could help Checkout ahead of an intended initial public offering. Dufétel maintained that the company is in no rush to IPO “and in the current markets even less so”. Pousaz ran the company with a “very long time frame in mind”, she added.

Pousaz also began building out a family office to make his own tech investments called Zinal, named after a mountain village in Switzerland that marks the finish line of a punishing 31km mountain race.

This is in addition to raising three children between the ages of two and 14, and a demanding travel schedule that can involve flying between various offices and his home in Dubai for weeks at a time.

“I don’t know anyone who works as hard as Guillaume, this guy,” says Philippe Laffont, founder of Coatue Management and an investor in Checkout. “When you go into a meeting with Guillaume, you have to be prepared.”

Additional reporting by Sarah White

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