June 22, 2018

PayPal acquires Sweden's iZettle in $2.2 billion deal

18 May 2018, 02:28 | Sam Montgomery

PayPal in talks to buy Swedish small-business platform iZettle for $2.2 billion

PayPal buys Swedish start-up iZettle for $2.2bn in its biggest ever deal

In what will be the company's biggest takeover, PayPal Holdings Inc has agreed to acquire Swedish fintech startup iZettle in a $2.2bn (£1.6bn) deal.

The deal announced Thursday marks the largest acquisition in PayPal's 20-year history and intensifies its competition with Square, a payment processor started by Twitter co-founder and CEO Jack Dorsey. The chip-card reader and its app for smartphone-based mobile commerce meet worldwide security standards. iZettle's service is available in 12 countries which includes United Kingdom, Finland, Denmark, Germany, Italy, Netherlands, Spain, Italy, Germany, and Brazil, among others. PayPal also gains near-term in-store expansion opportunities into other existing PayPal markets, and acceleration of omnichannel commerce solutions in Australia, U.K. and U.S.

Dan Schulman said in the statement, "iZettle and PayPal are a strong strategic fit, with a shared mission, values, and culture - and complementary product offerings and geographies". It has since expanded into financing services, with a presence in Brazil, Mexico and Europe.

Jacob de Geer, iZettle's chief executive, said the deal would "provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow". The company has grown its revenues at a CAGR of approximately 60% from 2015 to 2017. iZettle expects to reach EBITDA profitability by 2020 on a standalone basis. The opportunity to become part of PayPal was too good to pass up.

Paypal's acquisition of iZettle has also come at a time when the latter has already filed for an IPO in the Stockholm stock market for raising almost $227 million. PayPal and iZettle have been in talks for years regarding a possible acquisition, but it was being delayed due to multiple reasons. The two companies will continue to operate independently until close.

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