Tag: Paymentsense

Dojo – Italy, Spain expansion critical as UK growth slows

Geoffrey BarracloughLeave a comment

Dojo has established itself as arguably the UK’s leading SME payments provider. But 2024/5 results for Typhoon Noteco (the holding company) show a business continuing to strain under the weight of its £649 million debt mountain, even as transaction volumes continue to grow and international expansion gathers pace.

Bar chart comparing Dojo's turnover and net debt from 2020 to 2025, with turnover shown in blue and net debt in orange.

Payment volume in the year to March 2025 rose 8% to £46.2 billion, a remarkable fourfold increase since 2020, but rather slower than the breakneck rates of recent years. Transaction volumes grew in line, keeping the average ticket flat at £19.25. Dojo claims a 12.5% share of the UK SME card-present acquiring market; evidence of its scale, but also a sign that it is now bumping up against the limits of its early-mover advantage.

A bar graph showing Dojo's payment volume in billions (£) from 2020 to 2025, with a blue bar series representing payment volume and an orange line indicating the take rate percentage.

Customer numbers were unchanged at around 146,000. Growth instead came from doing more with the same base: volume per merchant was up 9% to £314,000, double the level of four years ago, and revenue per merchant climbed 12% to £3,105. This upmarket shift suggests Dojo is increasingly targeting larger SME accounts though its relationships with ISVs, rather than chasing new signings at the bottom end of the market.

A bar graph illustrating the number of merchants and payment volume per merchant for Dojo from 2020 to 2025, with blue bars representing the number of merchants and an orange line indicating the payment volume per merchant.

Dojo’s early success rested on its fast, elegant Android terminals (notably the PAX A920), a slick onboarding experience, and a distribution model powered by self-employed agents. It has since expanded its product suite to include SoftPOS and claims over 450 ePOS and ISV integrations. That strategy has worked but it has also been copied.

The so-called “tap pack” — SumUp, Viva, myPOS, Zettle and now FlatPay — are all pressing into the UK. Shift4, meanwhile, has entered aggressively, acquiring a small ISO and poaching from Dojo’s salesforce. Adyen is hoovering up ISV relationships while software-first providers such as Toast are increasingly offering integrated payments solutions that sideline traditional high-street focused payment players.

With UK growth moderating, international expansion is becoming central to Dojo’s story. The group has secured an e-money licence in Ireland and has launched its SME proposition in Spain (hiring a strong local team) and Italy. These markets are dominated by incumbent acquirers who have been slow to modernise, but unlike the UK in 2020, Dojo won’t enjoy years of open runway. Competitors, including many of the “tap pack” are already established and local conditions tougher, making execution key.

Returning to the 2024/5 results. Dojo’s turnover increased 11% to £455 million, but gross profit grew just 4% to £226 million. Operating profit fell sharply to £17 million as administrative costs rose. Staff expenses were well controlled: total spend rose just 3% to £85.6 million, with headcount flat at 1,153 and average cost per employee steady at £74k.

Finance costs remained punishing at £92.6m, broadly unchanged from 2023, but still more than five times operating profit. This pushed pre-tax losses to £75 million. Accumulated losses now stand at an eye-watering £720 million.

Bar chart showing Dojo's financial performance in millions of pounds from 2020 to 2025, highlighting turnover, pre-tax loss, and operating loss/profit.

Cash at year end was stable at £39 million, but with net debt at £649 million and an effective interest rate of 14%, leverage remains punishing at 6.6× EBITDA. An equity injection of $190 million in April 2025 by a new investor into the parent company will help, but it underlines how dependent the group is on fresh capital to sustain expansion.

Dojo had planned to move from its high-profile office in the Brunel Building at Paddington – which it shares with the Premier League and GB News – to the even swankier Renzo Piano-designed Paddington Square nearby. The deal fell through leaving Dojo obliged to settle this long running property dispute with an agreed payment of £15.7m

Dojo remains a formidable player: scale, brand recognition, and a strong partner network have given a significant chunk of the UK SME market, with volumes still climbing and margins holding steady.

The question for 2025 and beyond is whether international expansion can deliver the kind of acceleration needed to cover the finance costs and push the group towards genuine profitability. Dojo has proven it can win merchants and grow volumes. Now it has to prove it can do so profitably, and in markets where it no longer has first-mover advantage.

Dojo reports a strong 2023, maiden operating profit and debt refinancing

Geoffrey Barraclough1 Comment

Paymentsense, parent company of the Dojo brand which has taken the UK market by storm, has reported its first operating profit and refinanced its debt mountain with a new facility which does not expire until 2030.

Paymentsense is the brainchild of two low-profile serial entrepreneurs –  Juan Farrarons and George Karibian. The duo intend to keep their foot on the gas, saying “the investors in the business continue to prioritise long term growth over short term profit.” 

According to documents filed at Companies House by Typhoon Noteco, the ultimate UK holding company of Paymentsense and Dojo, payment volume for the year to March 2024 rose 29% to £43bn, continuing the astonishing growth witnessed since 2021.  The number of transactions processed was up 32% at 2.2bn with ATV falling 2% to £19.24. This mirrors a consistent trend across the market as low ticket transactions continue to move from cash to cards. 

Revenue rose 37% to £409m. The overall take rate increased 6bps to 0.96% and revenue per transaction was up 3% at 9.8p. 

Paymentsense cleverly built the Dojo brand around the PAX A920. Other providers can re-sell PAX devices but only Paymentsense sells Dojo. In just a few years, the eye-catching white terminals have become ubiquitous on Britain’s high streets. Initially, known for its keen pricing and generous contract-buyouts, Dojo has begun to increase prices and the service, based on a branded PAX A920, is no longer cheap. Standard pricing is £30/month for a terminal (rental + “platform fee”) + 5p per transaction + 0.75% debit or 1.2% credit for processing.

Dojo has made a push into integrated payments in partnership with software vendors (ISVs) and claims 400 ePOS partners. This brings a better quality of merchant – higher transaction volumes and less likely to churn. And the customers seem happy. In this case study, a small restaurant chain reduced till discrepancies by 90%, saving 10 hours of admin per week. 

The combination of price increases and ISV distribution is making Dojo’s underlying metrics look very good indeed. Although Dojo only grew customer locations by 3% to 150K, volume per location was up 25% at £284K and revenue per location up 34% at £2,700.

Total gross profit rose 36% to £218m.

In advance of the refinancing, management took steps to reduce costs saying that the business has “undergone a restructuring process…. streamlining various business units, optimising the organisational hierarchy and reallocating resources to key growth areas.”

30% of the sales team was axed although with additional recruitment in back-office functions total staff numbers rose from 960 to 1136. Employee costs were up 17% to £83m at an average of £73K each.. 

Management continues to invest in scaling the “cloud native next generation card acquiring Dojo platform” which it hopes will allow the business to expand into larger merchant segments as well as new territories. The business says that becoming an acquirer was a critical support for its growth strategy. Paymentsense has now received an e-money license for Ireland which it uses for a new Dojo business recently launched in Spain. Paymentsense believes that the hospitality-heavy Spanish payment market is ripe for a modern restaurant-focused payment proposition.

There is an intriguing subplot revolving around the company’s swanky central London office in the Brunel Building at Paddington, a location shared with the Premier League. Management reported £6.8m of property income generated by subletting unused floors of the Brunel building but has now committed to staying in the Brunel and leasing additional space. Before this decision, Paymentsense looked seriously at moving to the nearby Paddington Cube and is in dispute with its prospective landlord. The case will go to trial in 2025 although these matters are normally settled out of court.

Adjusted EBITDA rose from £69m to £94m with margin held steady at 23%. 

Net debt rose £98m to £596m requiring interest payments of £91m, up from £62m in 2022. Paymentsense will need to maintain its fast pace of growth to support the higher interest payments associated with its new, long term debt. Total debt is equivalent to 6x EBITDA, still chunky, but down from 7x EBITDA in 2023.

Paymentsense made an operating profit for the first time of £32m, a very welcome milestone but not yet enough to cover the increasing cost of servicing its expanding mountain of debt. The business remains loss making at a pre-tax level although deficit was cut to £59m in 2023 from £141m the previous year. Accumulated losses now stand at an eyewatering £644m. Paymentsense has consumed a remarkable amount of capital.

Nevertheless, with its debt refinanced, management will be delighted with the 2023 results. All UK metrics are looking positive and the business is getting good at converting additional payment volume into profits. Continued growth in the UK will be challenging as Dojo maintains its higher price points and new entrants such as Shift4, Toast and a revitalised Global Payments compete for SME POS payments. Much may be riding on the Spanish expansion.

Paymentsense debt mountain grows despite phenomenal sales performance by Dojo

Geoffrey Barraclough1 Comment

Dojo, the SMB card payment brand created by Paymentsense, has taken the UK market by storm but with its parent company racking up £498m debt, a tricky re-financing is looming in 2025.

Based by the canal in Paddington, in a swish office building shared with the English Premier League, Paymentsense is the brainchild of two low-profile serial entrepreneurs – Juan Farrarons and George Karibian. The team also founded Judopay, a mobile payment gateway recently sold to Fabrik, and Capital on Tap which issues credit cards to SMEs.  

Paymentsense says that “investors continue to prioritise growth over short-term profit and are investing heavily in both technology and customer acquisition.“ Their confidence has been rewarded by payment volume trebling in just two years, reaching £33bn in the year to March 2023. I can’t think of another European POS-focused payment brand growing as quickly.

Dojo added a net 26,000 customer locations and now serves 146,000 premises. The customer base is moving upmarket which is a positive trend. Average volume per location rose 26% to £227,000 and larger merchants now include restaurant chains Cote and Pizza Pilgrims. 

Paymentsense has been migrating more merchants to its in-house acquiring service. This helped turnover grow 66% to £298m with the take rate ticking up 7 bps to 0.9%. 

Management explains that Dojo was only possible once the company built its own processing platform and stopped being reliant on Fiserv/First Data. As Nick Fryer, CTO explained in this interview with Fintech Magazine:

“It was frustrating that we couldn’t change the product, which was very similar to everyone else’s, and our key sales tools; our salesforce [were] awesome, but we knew we could do even better by our customers. So we looked at ways of taking control of the product, trying to make it better and more customer-focused.”

Paymentsense cleverly built the Dojo brand around the PAX A920. Other providers can re-sell PAX devices but only Paymentsense sells Dojo. In just a few years, the eye-catching white terminals have become ubiquitous on Britain’s high streets. The original Dojo has now been joined by the smaller Dojo Pocket. This includes ePOS integration so that restaurant staff can generate bills and take payment at table.  A counter-top terminal is promised soon.

Walkup, a restaurant booking app purchased for £20m in 2022 and now renamed Dojo.app adds to the hospitality proposition. However, Walkup seems to have made little impact so far. It recorded an operating loss of £847K on sales of just £473K.

Dojo’s investment in a large field sales force backed with aggressive digital marketing is one key reason for its success. Dojo also appeals to SMBs by only insisting on a minimum six-month contract and being willing to pay up to £3,000 to buy customers out of multi-year contracts with other providers. This advantage has been eroded by the regulator’s drive to cap contracts at 18 months. Another early differentiator was Dojo’s commitment to next day settlement, although this has now also been replicated by competitors.

Almost all merchants are in the UK. The small Irish operation – which processes through Valitor Rapyd – accounted for just £8m sales but Paymentsense has big plans. It has secured an e-money licence in Ireland which gives the ability to operate across Europe.

For the Paymentsense group as a whole, administrative expenses rose 31% to reach £244m. More than half the extra cost was accounted for by a 76% increase in employee expenses which rose to £71m driven by both higher staff numbers (almost 1,000) but also sharply higher salaries. Total spend per staff member was 49% higher at £73,000. The staff need somewhere to work. Paymentsense is taking a new 55,000 sq ft office in Bristol.

While management is pleased that adjusted EBITDA, the company’s preferred measure of profitability, more than doubled to £69m, the bottom line doesn’t look so pretty.

After deducting £122m of depreciation and amortisation and a further £62m of net interest payments, Paymentsense lost £141m before tax, roughly the same as the previous year. Accumulated group losses recorded by Typhoon Noteco, the ultimate UK holding company, now stand at an eye-watering £582m according to documents deposited at Companies House.

The group’s outstanding debt rose £86m to £498m giving a debt to EBITDA ratio of 7.2x. A £320m bond at 8% is due in 2025 and a long-term loan of £180m at 16.25% is due in 2026. Refinancing this debt mountain could be a challenge in today’s market conditions.

Paymentsense has built an impressive sales and marketing machine but competitors have begun to react to the Dojo phenomenon. The business will need to continue to innovate if it is to avoid a crunch in 2025.

Explosive growth for Dojo but losses mount at Paymentsense

Geoffrey Barraclough1 Comment

Paymentsense, a leading payments provider based in London, has reported spectacular growth in the year ending March 2022, with total payment volume rising 89% to £21.6bn. 

The company, founded by two low-profile entrepreneurs – Juan Farrarons and George Karibian – has long been one of the UK’s largest and most innovative independent sales organisations (ISOs). The duo also founded Judopay, a mobile payment gateway, and Capital on Tap which issues credit cards to SMEs.

Despite its impressive topline growth in 2022, the company reported significant losses. Typhoon Noteco, the ultimate UK holding company, recorded a pre-tax deficit of £141m on turnover of £179m in filings at Companies House. 

Paymentsense’s recent turbocharged growth has been driven by its Dojo product, a rebranded PAX A920, which has taken the UK small business market by storm. The Dojo terminals can be seen everywhere, thanks to its simple and transparent pricing, next day settlement and short contracts.

Reflecting the good sales performance, merchant locations rose 39% to 120,000, with payment volume per location growing 36% to £180,000. This indicates that Dojo is increasingly penetrating larger merchants. Management has stated that the impact of Covid in accelerating cash to card switching has boosted average merchant volume by 20-30%.

All new customers will be boarded onto Dojo and the product has been further enhanced with the addition of a virtual queue and booking management system for restaurants, stemming from the acquisition of Walkup for £20m. Six hundred customers have signed up so far at a list price of £99 per month. 

Management explains that the development of Dojo was only possible once the company built its own processing platform and stopped being reliant on First Data for product. As Nick Fryer, CTO explained in an interview with Fintech Magazine, “It was frustrating that we couldn’t change the product, which was very similar to everyone else’s, and our key sales tools; our salesforce [were] awesome, but we knew we could do even better by our customers. So we looked at ways of taking control of the product, trying to make it better and more customer-focused.”

Total cost of sales grew 118% to £87mm, resulting in gross profit rising just 36% to £93m. Additionally, the company has been hiring aggressively, with staff numbers growing 74% to 816 and total employee costs doubling from £20m to £40m in FY 2022.

The company points to a positive underlying operating performance and an adjusted EBITDA of £33m although this is before charging £115m in depreciation and amortisation and a further £51m in net interest expense. Total pre-tax losses were £141m and total net debt stood at £411m at the end of March 2022. The debt funding includes a £320m bond and £110m of loan notes which may need renegotiation before the next repayments are due in October 2025. If Dojo continues to grow this fast, that shouldn’t be a problem.