What is iZettle? Swedish company revealed after PayPal acquisition
- Internet payments giant PayPal announced that it's buying iZettle for $2.2 billion
- The start-up was planning to become a publicly traded company before the deal
- PayPal spun-off from ecommerce giant eBay in 2015 and is valued at over $90bn
Internet payments giant PayPal has revealed that it is buying Swedish financial technology company, iZettle for $2.2 billion (£1.6bn).
PayPal, which spun-off from ecommerce company, eBay, three years ago, broke the news of the acquisition just over a week after the Swedish start-up revealed it was planning an IPO.
'Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile,' PayPal chief executive Dan Schulman said in a statement.
Schulman said the iZettle merger was a ‘strategic fit’ for PayPal. The acquisition will see PayPal broaden its reach into new territories such as Brazil, the Nordic markets of Denmark, Finland, Norway and Sweden.
Internet payments giant PayPal has announced that it is buying iZettle for $2.2 billion
‘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,’ iZettle chief executive Jacob de Geer said in the release.
Here is all you need to know about iZettle, including what it does and when it was founded.
What is iZettle?
iZettle is a financial technology company that handles retail transactions for small businesses through a range of commerce apps and payment card readers.
The company was founded in Stockholm in 2010 by Jacob de Geer and Magnus Nilsson, after the former’s wife, a sunglasses importer, complained about the difficulty of accepting card payments at a trade fair.
According to de Geer this was because traditional card readers were too costly for many sole traders and sole businessmen.
We’re excited to acquire @iZettle, a leading #SmallBiz commerce platform in Europe & LatAm, expanding our in-store presence & enhancing $PYPL’s position as a global one-stop-shop for omnichannel commerce. Learn more: https://t.co/awFFM5jFM3 pic.twitter.com/xcjky5NxKk
— PayPal Corporate News (@PayPalNews) May 17, 2018
The company launched its first reader in 2011. In February 2012, the company expanded to the Nordics, UK and Germany.
The following year it set up operations in Brazil and Mexico.
In 2018, the company expects to handle over $6 billion in transactions and take in roughly $165 million in gross revenue.
Despite this, the company has yet to turn a profit, saying it expects to reach profitability in 2020.
PayPal's iZettle acquisition
It was only ten days before PayPal announced its acquisition of iZettle, that the Swedish fintech company was planning to go public.
‘We’ve taken a decision as a company to prepare the company for a listing, not really knowing when in time that is, but we’re doing everything we should as a company to make sure we have our ducks in a row to follow an IPO track,’ said back in December 2017.
Big news - iZettle to join forces with PayPal. Becoming a part of the PayPal family will give us and our merchants an amazing opportunity to grow and expand. We’re so excited! Read Jacob’s thoughts on the news here: https://t.co/6Pc9eKOTKx pic.twitter.com/881a9TtzGq
— iZettle (@iZettle) May 17, 2018
While at the time, the company wasn’t sure whether it would list on the London or Swedish stock exchange, by May 8, 2018, it was, announcing the latter.
Ten days later, PayPal bought it for $2.2 billion. De Geer explained the PayPal decision in a company release: ‘As you might have heard, we were preparing the company for a potential IPO. But plans sometimes change.'
Had iZettle gone ahead with an IPO, its value would have been put at slightly more than $1 billion.
‘Late in the IPO process, PayPal got in touch and showed a serious interest in iZettle. The relationship with PayPal is not a new one, in fact we’ve talked about different ways of working together for years,’ de Geer added.
‘But this time it very quickly turned into a detailed discussion on how we could benefit from joining forces. And we both realised the great opportunity in doing just that.’
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