PayPal snaps up iZettle in $2.2bn deal

18 May, 2018, 17:29 | Author: Corey Lynch
  • PayPal President and CEO Dan Schulman

IZettle Chief Executive Officer Jacob de Geer on May 8 said the company was "fully focused" on the IPO plan announced that morning.

It owns the peer-to-peer payments company Venmo, which is popular in the U.S., and a year ago acquired Swift Financial, which makes business loans.

PayPal is shelling out $2.2 billion for the deal and it is going to be an all-cash transaction.

Founded in 2010 by de Geer and Magnus Nilsson, iZettle started out with a mobile-phone gadget for accepting credit card payments.

The acquisition "significantly expands PayPal's in-store presence, strengthening PayPal's platform to help millions of small businesses around the world grow", CEO Dan Schulman said in a statement. It has since expanded into software and financing services to support small businesses.

Announcing the takeover, the companies said that by joining forces with PayPal, iZettle would be able to accelerate its worldwide expansion including to the US.

The takeover comes less than three weeks after iZettle said it would list shares in Stockholm.

The $2.2 billion PayPal is putting up for iZettle is the San Jose, California-based company's biggest ever deal, according to data compiled by Bloomberg.

IZettle has almost half a million merchants on its platform and expects to generate gross revenues of $165m (£122m) in 2018, processing total payments of around $6bn (£4.4bn).

At close, PayPal will get in-store capabilities in 11 markets, including Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden. While it may raise some questions around the ambitions of European technology startups, given that iZettle had recently revealed its intentions to go public, it also revealed how eager PayPal is to boost its brick-and-mortar aspirations in Europe. But just how iZettle will be integrated with PayPal's own competing point-of-sale payment services remains to be seen.

Subject to customary closing conditions, the deal is expected to be completed in the third quarter of this year.



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