(Bloomberg) -- A college dropout from Switzerland has amassed a $14 billion fortune to become one of the country’s richest people by creating a rising star in electronic payments.

Guillaume Pousaz is the founder and chief executive officer of Checkout.com, which this year raised funding at a valuation of $40 billion, making it worth more than British telecoms giant Vodafone Group Plc. But in its formative years, his company also got business from clientele Pousaz doesn’t like to talk about: porn and gambling websites. 

His path to create one of Europe’s most valuable startups circles the globe — from the U.S., where he pursued a passion for surfing and got his first taste of the payments industry, to Singapore, where he founded Checkout’s predecessor while still in his 20s.

The 41-year-old — who owns 60% of Checkout, filings show — now resides in Dubai with his wife and three children. In addition to running the London-based company, he operates a newly formed family office that has invested in fintech startups, positioning the entrepreneur as a rainmaker in technology throughout the region.

“In the fintech space, he’s looked upon as someone who can show people that building a company and scaling it to this size is possible,” said Gerard Grech, chief executive officer of UK industry group Tech Nation.

A snowboarder in his youth who appeared in sports magazines, Pousaz is dismissive of the ability of traditional banks to compete in the world of e-commerce and advocates for cryptocurrencies and Web3, a loose set of technologies aimed at decentralizing the internet.

Tall and lean with piercing blue eyes, Pousaz speaks with swagger about Checkout’s journey from back-room shop to part of the web’s financial plumbing. His company, which has an eye on an eventual public listing, boasts that it got help from big-ticket customers like Netflix Inc. and venture backing from prominent firms including Tiger Global, and is moving away from risky porn clients.

‘Savoir Faire’

“Investors are believing in our ability to build a very large business in what is essentially one of the largest total addressable markets,” Pousaz told Sky News in January. “We have the savoir faire” and the technology to beat traditional banks in electronic payments.

He wields his appeal to bigger businesses to take swipes at rivals like Stripe Inc. and Adyen NV. In a TechCrunch interview in 2020, he said Checkout jokes internally that it’s “the Stripe graduation program” because of a focus on blue-chip clients rather than smaller merchants, which make up much of Stripe’s customer base.

But there have been recent signs of growing pains. Checkout is eliminating about 100 people, or roughly 5% of its staff. Separately, the company fired several employees earlier this year due to harassment complaints that arose from an off-site trip to Cyprus.

Key executives are also departing. Chief Revenue Officer Nick Worswick left in July by mutual agreement, a Checkout spokesperson said. Worswick declined to comment. 

The company has also been bulking up in volatile segments as it seeks to expand. Fintech and cryptocurrency transactions accounted for more than half of Checkout’s payments volume as of January. Many crypto trading platforms have since seen transactions drop amid a broader downturn in valuations for the digital currencies.

Raised in Geneva, Pousaz initially had hopes of becoming an investment banker and began studying mathematical engineering at Ecole Polytechnique Federale de Lausanne. He dropped out of university in his final year in 2005 after his father was diagnosed with pancreatic cancer, moving to California mainly to go surfing. 

He started working for a payments-processing firm in the US in 2006 and founded a money-transfer service called NetMerchant the following year. That provided him with capital, and he bought Mauritius-based SMS Gateway in 2009, which became the basis for a venture in Singapore called Opus Payments. 

An early break came in 2011 when Opus signed a deal with Chinese e-commerce website Dealextreme, making the company profitable and allowing it to finance expansion. A year later, Opus morphed into Checkout and shifted its base to the UK after receiving an operating license. 

Checkout bagged Netflix as its first blue-chip client in 2018. While the deal was only for a slice of the streaming service’s business — typical for the payments industry — it was a key validation and put Checkout firmly in the sights of investors. Its first funding round closed the next year, valuing the company at $2 billion.

But in its early days, Checkout worked with clients that provide adults-only services including pornography and gambling, which at one point accounted for a significant amount of business, according to people familiar with the matter. 

The clients included companies like MindGeek SARL, the owner of websites like Pornhub.com, OnlyFans Ltd. and MondoCamGirls, a website that allows users to pay for live feeds of sexual content, the people said.

Pousaz has referred to Checkout’s early days as “scrappy” but has denied getting much revenue from adult sites. In a 2020 interview with Sifted, an online news site about European startups, he called rumors of a reliance on porn sites “quite annoying.” 

Exiting Porn

In a response to questions from Bloomberg, Checkout acknowledged it worked with porn and gambling sites, but the business volume wasn’t significant. 

“From our early years, adult content and gambling were immaterial contributors to Checkout’s overall processing volumes, revenue, growth and success,”  a company spokesperson said. “Checkout has since exited adult content entirely, serving no merchants in this category.”

Transparency is crucial as the company sets its sights on a potential listing. The business of moving money around the internet is complex and opaque, and regulators have struggled to keep pace. E-money companies have seen growth and suspicious activity reports surge.

Read more: Fintech Boom Masks a Shady Side of London’s Money Hub

Business in adult-only industries can also prove an uncomfortable risk for financial firms. Notably, OnlyFans said last year it would ban sexually explicit material after coming under pressure from banking and payment services, before later reversing course.

“When I first met them it was five or six guys sitting around a table in a small rented office behind Oxford Circus,” said Kevin Jenkins, a former managing director at Visa who advises financial-technology startups. “You have to admire that, but investors need to understand what that business model is in reality.”

As Checkout gains customers like Sony Corp., Pizza Hut Inc. and Grab Holdings Ltd., the company is cleaning up its client list. Its latest terms and conditions explicitly say Checkout’s services may not be used for pornography. 

In the latest funding round, Pousaz secured big-name backers including Franklin Resources Inc., Qatar Investment Authority and Tiger Global. Other key long-term investors include Insight Partners and DST Global.

With Pousaz’s wealth surging, he launched Zinal Growth — a family office named after a Swiss mountain village — and hired former Swiss Startup Group executive Guillaume Waser as managing partner. The entity has since made investments in fintech startups Ziina and Wayflyer, as well as blockchain firm Snickerdoodle Labs.

When announcing the new investment in January, Checkout said it had tripled transaction volume in its home markets for the third year in a row. Bolstered by the influx of cash, it’s expanding in the US and betting more on cryptocurrency, partnering with exchanges including Binance Holdings Ltd. 

“E-commerce volumes are down, crypto winter is upon us so Checkout needs to work hard to open up new markets and additional customer segments,” said Ophelia Brown, who was an early investor in Checkout through her fund Blossom Capital. “These challenges are not new, rather ones that are welcomed as a test.”

©2022 Bloomberg L.P.