Paypal acquires Swedish fintech startup iZettle for $2,2 billion

Paypal acquires Swedish fintech startup iZettle for $2,2 billion

PayPal has agreed to acquire iZettle, a leading European fintech startups, for $2.2 billion, the companies said on Thursday.

The all-cash deal is PayPal's biggest-ever acquisition following its divorce from former parent company eBay in 2015, and comes just weeks after iZettle, which now operates in 12 countries around the world, filed for an IPO as it looked to expand.

The deal is the biggest ever for San Jose, Calif. -based PayPal and will help it compete with Square (sq), which made a name for itself by helping small businesses and food-truck vendors conduct credit card and mobile transactions. The chip-card reader and its app for smartphone-based mobile commerce meet worldwide security standards. iZettle's service is available in 12 countries which includes United Kingdom, Finland, Denmark, Germany, Italy, Netherlands, Spain, Italy, Germany, and Brazil, among others. "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 the U.S".

IZettle has almost half a million merchants on its platform and expects to generate gross revenues of $165m (£122m) in 2018, processing total payments of around $6bn (£4.4bn).

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"When we think about the combinations and capabilities of PayPal and iZettle", Schulman added, they "set us apart from anyone else".

"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", said De Geer.

The Stockholm-based company had been aiming to achieve a valuation of $1.1bn, but was presented with double that amount by PayPal. The opportunity to become part of PayPal was too good to pass up. "With almost 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".

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