Online payment platform PayPal agreed yesterday to acquire Sweden-based mobile payment technology developer iZettle for $2.2bn in cash, allowing corporate investors Intel, Mastercard, American Express and Santander to exit.
Founded in 2010, iZettle has built a mini card reader that enables small businesses to accept contactless and mobile payments, as well as software that allows them to take payments using smartphones, and e-commerce tools that help users create and run an online store.
The company, which has projected $165m in revenue for 2018, had planned to launch an initial public offering in Sweden and filed last week to raise up to SEK2bn ($228m) in a flotation on the Nasdaq Stockholm exchange that will now be withdrawn.
The purchase will increase PayPal’s real-world presence in several markets and allow it to enter the offline payment space in 11 countries across Europe and Latin America.
Jacob de Geer, co-founder and CEO of iZettle, will continue to head the company post-acquisition, reporting to Bill Ready PayPal’s, COO.
Dan Schulman, president and CEO of PayPal, said: “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.”
The deal follows more than $280m in financing, iZettle having most recently raised approximately $47m from Dawn Capital, the Fourth Swedish National Pension Fund and undisclosed existing investors in December 2017 at a $950m valuation.
Mastercard joined Greylock Partners, Northzone and SEB Private Equity for the company’s $32m series B round in 2012, before fellow payment services firm American Express invested an undisclosed amount later the same year.
Financial services firm Santander provided $6.7m for iZettle in 2013, before the company raised $61.3m in a 2014 series C round featuring chipmaker Intel’s corporate venturing unit, Intel Capital, as well as Greylock, Northzone, SEB, Dawn Capital, Zouk Capital, Creandum, Index Ventures and Hasso Plattner Ventures.
Intel Capital returned for iZettle’s $130m series D round, which closed at a $500m valuation in January 2017, participating alongside Zouk Capital and undisclosed existing investors, while Victory Park Capital unit VPC Speciality Lending supplied debt financing as part of the round.