Danish startup FlatPay joins the club of European fintech startups to track

Flatpay, which facilitates card payments for small and medium-sized businesses, has joined the ranks of European fintech startups — or startups valued at more than $1 billion — a milestone that has helped drive some of the region’s largest exits. These companies include competitors such as Adyen, a Dutch payment processing giant that is still far ahead in terms of size. However, Flatpay’s new funding could help it narrow the gap.

Flatpay’s bet is that it can challenge the big players by charging small merchants flat transaction fees for using its card terminals and point-of-sale systems. This focus on a segment that represents 99% of European businesses has achieved rapid traction: the startup now claims to have around 60,000 customers, compared to 7,000 customers in April 2024.

Flatpay’s valuation has grown at a similarly rapid pace. The Danish startup is now valued at €1.5 billion ($1.75 billion), and has reached unicorn status in just three years. But while CEO and co-founder Sander Janka Jensen is proud of this accomplishment, he has his eyes on another metric: annual recurring revenue (ARR).

“We crossed €100 million of ARR in October,” Janca-Jensen told TechCrunch. He added that this amount (about $116 million) is increasing by about one million euros per day ($1.16 million). “The plan for 2026 is to grow another 300%, so we hope to leave the year with between €400 and €500 million of ARR.”

To fund this ambitious growth — given that the startup is still unprofitable — Flatpay raised €145 million in its latest round (about $169 million). The round was backed by AVP Growth and Smash Capital, as well as Dawn Capital, which led the startup’s €47 million Series B. German footballer Mario Götze also participated in that previous round.

The newly raised capital will support continued growth in Flatpay’s existing markets – Denmark, Finland, France, Germany, Italy and the UK – as well as further expansion into one or two new markets in the coming year. Janka Jensen declined to reveal which, but job advertisements suggest the Netherlands could be next.

Flatpay currently has 1,500 employees – or “flat payers” – and plans to double their number by the end of next year. Increasing headcount is a goal the company places on the same level as revenue, stating in a press release that it aims to grow 10x by 2029. This may seem unusual, but it goes hand in hand with the company, which onboards its clients in person.

This stems from its premise that SME owners are actively looking for new solutions, even if their current systems are expensive or inadequate. “This is where we come in the door,” Janka Jensen said. He means it literally – Flatpay shows up with pen and paper to explain their rates, and with card terminals for on-the-spot demos. “Every salesperson has that bag.”

This pragmatic approach is what may help Flatpay increase market share that is also desired by legacy providers, big fintech players such as PayPal, Stripe and SumUp, as well as new entrants focused on specific sectors, such as hospitality. But the real difference may be the insight behind it: SMBs want simplicity, and Flatpay leaves them “ready to go.”

While this results in higher than average customer acquisition costs, especially when combined with 24/7 customer support, Janka Jensen said creating demand allows the startup to grow much faster than it might otherwise. In turn, this triple-digit growth makes Flatpay’s focus on human interaction more palatable to investors, even during today’s AI-obsessed investment cycle.

The company isn’t completely ignoring AI, it’s using the technology for real-time features and is experimenting with voice AI clients. Flatpay also plans to expand further into the fintech space through a banking group that includes cards and accounts. For Janka Jensen, the key is gradual adoption – so that SME owners, instead of burning out, can “eat the elephant one bite at a time”.