PayPal announced today that it has agreed to acquire Stockholm-based iZettle, the leading small business commerce platform in Europe and Latin America, for $2.2 billion. The acquisition of iZettle significantly expands PayPal’s in-store presence, strengthening PayPal’s platform to help millions of small businesses around the world grow and thrive in an omnichannel retail environment.
Founded in Stockholm in 2010, the fintech company iZettle revolutionized mobile payments with the world’s first mini chip card reader and software for mobile devices. Today iZettle’s commerce platform for small businesses provides tools to get paid, sell smarter and grow your business. iZettle’s largest shareholders before the acquisition were Zouk Capital, Index Ventures and 83North. The first time we wrote about iZettle was in August 2011, when Index Ventures made its first investment in the company.
PayPal President and CEO Dan Schulman stated: “iZettle and PayPal are a strategic fit, with a shared mission, values and culture—and complementary product offerings and geographies. In today’s digital world, consumers want to be able to buy when, where and how they want. With nearly half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal’s market opportunity to be a global one-stop solution for omnichannel commerce.”
This combination brings together iZettle’s in-store expertise, recognized brand and digital marketing strength with PayPal’s global scale, mobile and online payments leadership, and trusted brand reputation.
Upon closing, PayPal gains in-store capabilities in the following 11 markets: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden. 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.
iZettle CEO Jacob de Geer stated: “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. The combination of iZettle and PayPal will 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.”
iZettle expects to generate gross revenues of approximately $165 million in 2018, with approximately $6 billion of total payment volume (TPV) expected to be processed on its platform. 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.
Once the acquisition closes, Jacob de Geer will continue to lead iZettle, which will operate as an integral part of PayPal’s merchant services offering, reporting to PayPal’s Chief Operating Officer Bill Ready. iZettle’s experienced management team, who have a demonstrated track record of scaling at pace, will continue running the business, ensuring continuity for customers, employees and partners. Upon closing, iZettle will become the European center of excellence for PayPal’s in-store product and services offerings.
