Digital payment giant PayPal has acquired fellow online payments platform iZettle in a deal worth $2.2bn.
This acquisition will increase PayPal’s in-store presence and will bolster its global use in the omnichannel retail ecosystem. Following the deal closure, PayPal will extend its reach to Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden.
PayPal will also benefit from in-store expansion into existing markets and support omnichannel commerce solutions in Australia, UK and US.
iZettle is looking to generate gross revenues of $165m in 2018, and around $6bn in total payment volume processed through its technology. Its revenue has risen at a CAGR of 60 per cent between 2015 and 2017. The company hopes to reach a profitable EBITDA by 2020 as a standalone.
Sweden-based iZettle is a mobile payments solution that helps small businesses to take payments, register and track sales, and get funding. The company has a selection of POS options, with one solution turning any smartphone or tablet into a payment terminal capable of accepting cash, card, mobile and invoice payments.
Its services include online invoicing, card readers, and POS terminals, as well as an access point to merchants for working capital to help grow the business.
iZettle CEO Jacob de Geer said, “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.”
Following the close of the deal, de Geer will continue leading iZettle, which will become a part of PayPal’s merchant services. The company will also become PayPal’s centre for in-store product and service offerings.
Last year, iZettle completed three rounds of funding, with it bagging a €40m investment led by Dawn at the end of the year. It also raised a €30m debt facility from the European Investment Bank, and a €60m Series D from Victory Park Capital.
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