Checkout.com, a payments startup once hailed as Europe’s most valuable, has experienced a dramatic fall from grace. From a towering $40 billion valuation, fueled by lucrative deals with cryptocurrency exchanges, particularly Binance, the company’s fortunes have dwindled. Recent corporate filings for Checkout’s UK arm reveal a 16% drop in revenue to $212 million, a decline directly attributed to the termination of a major client, heavily implied to be Binance. This severed relationship followed Checkout’s decision to cease processing credit card payments for the exchange due to mounting regulatory concerns surrounding money laundering. The loss of Binance, once Checkout’s largest customer, represents a significant blow, considering the exchange reportedly accounted for $2 billion in transactions processed by Checkout in a single month in 2021. This substantial volume of business contributed significantly to Checkout’s impressive $1 billion funding round in 2022, propelling founder Guillaume Pousaz to the ranks of Europe’s wealthiest individuals.
The unraveling of the Checkout-Binance partnership culminated in a legal threat from Binance, though the situation took a dramatic turn with Binance founder Changpeng Zhao’s guilty plea to money laundering offenses. Zhao’s subsequent resignation as CEO in November 2023, coupled with a hefty $4.3 billion fine levied against Binance by the US Department of Justice, underscored the gravity of the regulatory scrutiny surrounding the crypto exchange. Zhao himself faced a $50 million fine and a four-month jail sentence. These events cast a long shadow over Checkout’s association with Binance, contributing to the reassessment of its value and financial stability.
The reverberations of the Binance fallout have been acutely felt by Checkout. One of its major investors, Franklin Templeton, drastically reduced its valuation of the company to $11.6 billion, a stark contrast to its previous peak. Adding to the complexity is Checkout’s intricate corporate structure, which includes a holding company in the tax haven of Jersey and a network of approximately 30 associated companies globally. This intricate web, further complicated by the transfer of assets and intellectual property to a new UK-based sister company, Checkout Technology Limited, makes it challenging to gain a clear picture of the company’s overall financial health. While Checkout maintains that the UK operations represent only a fraction of its global business and claims continued growth, the available financial data from the UK entities paints a concerning picture.
Checkout’s UK arms reported combined losses escalating to $258 million, up from $176.6 million in 2022. The need to secure a $200 million loan, collateralized by shares in the Jersey parent company, further highlights the financial strain on Checkout Technology Limited. Despite assertions of global growth, these financial indicators suggest significant challenges for the company. A substantial portion of Checkout’s expenses is attributed to its workforce. Even after multiple rounds of layoffs and executive departures, the two UK entities still employ over 1,100 staff, incurring a $159.1 million wage bill, albeit a 25% reduction from 2022. Checkout reports a global headcount exceeding 1,700, despite closures of several international offices.
The turmoil at Checkout extends to its leadership ranks. A wave of departures over the past 18 months has seen key figures exit the company. Among those who have resigned are Wolfgang Bardorf (Treasurer), Michael Weigand (Chief Compliance Officer), Ott Kaukver (CTO), Kerry Van Voris (Chief People Officer), Céline Dufétel (COO), and Nirupam Sinha (CFO). This exodus of senior leadership raises questions about the company’s stability and future direction. The rapid turnover at the top suggests potential internal challenges and disagreements regarding the company’s strategy in the aftermath of the Binance debacle.
Adding another layer of complexity to the narrative is founder Guillaume Pousaz’s relocation back to the UK from the UAE and his establishment of a charitable foundation in Jersey, the same tax haven where Checkout’s holding company resides. Pousaz also established a family office, Zinal Growth. Despite the restructuring and leadership changes, Pousaz remains the ultimate controlling party of Checkout, leaving his imprint on the company’s trajectory as it navigates these turbulent times. The convergence of these factors – the loss of a key client, declining revenues, mounting losses, executive departures, and the founder’s relocation and financial maneuvering – paints a picture of a company grappling with significant challenges and undergoing a period of profound transformation.
