Published: Fri, May 18, 2018
Science | By

PayPal buys payments startup iZettle for US$2.2 bn

PayPal buys payments startup iZettle for US$2.2 bn

PayPal has agreed to buy Swedish payments group iZettle for $2.2bn, in a deal that will "significantly" expand its in-store presence.

PayPal already have a card reader, but where iZettle are strong is their in-store expertise, digital marketing strength and mobile point-of-sale technology.

The firm iZettle was founded in Sweden, providing credit card readers to small businesses.

"The global scale and 19 million merchant relationships that PayPal has enables us to move faster and reach further than ever before".

"We believe that the listing will support our continued growth, our strategy and provide us with improved access to capital markets", CEO Jacob de Geer told CNBC at the time.

It has since expanded into financing services, with a presence in Brazil, Mexico and Europe. "Upon closing, we will gain in-store capabilities in 11 markets, near-term in-store expansion opportunities into other existing PayPal markets, and the acceleration of omnichannel commerce solutions in Australia, U.K. and U.S". 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.

As per the deal, the position of iZettle's co-founder and CEO Jacob de Geer will remain intact. iZettle's entire executive team will also continue the operation as before.

Neither PayPal nor iZettle would respond to requests for comment on Thursday evening.

Nasdaq-listed PayPal, which was previously part of the same company as the online auction site eBay, is a giant in the sector, disclosing in its first-quarter results last month that it processed $49bn in mobile payments during the three months to 31 March.

Evercore is acting as sole financial adviser to PayPal, and Skadden, Arps, Slate, Meagher & Flom LLP and Roschier are acting as its legal advisers with regard to the transaction.

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