PayPal agrees $2.2bn deal for Swedish payments firm iZettle

Leigh Mccormick
May 18, 2018

The deal will enable PayPal to expand its presence in in-store payments globally, and will mark the largest-ever acquisition by the California-based company.

Founded in Stockholm in 2010, iZettle started out selling credit and debit card readers that could be plugged into smart phones and tablets. The company also offers services such as cash advances and an ecommerce offering in a bid to provide a full-fledged commerce platform for small businesses.

By joining forces with PayPal, which operates in 200 countries, iZettle will be able to accelerate its worldwide expansion, including to the US.

PayPal said it hopes to be able to reap the advantages of the merger nearly immediately in certain areas, and that the financial benefits will kick in shortly after the deal closes, expected in the third quarter. "Together, we will help small businesses around the world grow and thrive in the global digital economy". In the past few years, PayPal had to face the competition from companies like Stripe and Square, and the company has to expand the game in order to keep the monopoly going.

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The Stockholm-based company had been aiming to achieve a valuation of $1.1bn, but was presented with double that amount by PayPal.

Upon closing, PayPal gains in-store capabilities in the following 11 markets: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden.

"Combining our assets and expertise with a global industry leader like PayPal allows us to deliver even more value to small businesses to help them succeed in a world of giants", said De Geer. 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. This is not the first time PayPal acquires startups with brilliant tech, but in this case, iZettle would have become a potential rival, had it raised enough funds via IPO. The two companies will continue to operate independently until close.

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