Published: Fri, May 18, 2018
Hi-Tech | By Kristin Zimmerman

PayPal buys payments startup iZettle for $2.2 bn

PayPal buys payments startup iZettle for $2.2 bn

PayPal is buying financial services startup iZettle for $2.2 billion to expand its digital payment service into thousands of brick-and-mortar stores in Europe and Latin America.

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 firm iZettle was founded in Sweden, providing credit card readers to small businesses. The company also offers services such as cash advances and an ecommerce offering in a bid to provide a full-fledged commerce platform for small businesses.

Being the biggest ever acquisition for Paypal, the payment giant is obviously taking a huge bet by acquiring the Stockholm headquarter startup.

This combination brings together iZettle's in-store expertise, recognized brand and digital marketing strength with PayPal's global scale, mobile and online payments leadership, and trusted brand reputation.

PayPal president and chief executive Dan Schulman said: "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".

The price being paid by PayPal - itself valued at more than $90bn (£66bn) - is double the valuation that iZettle was reported to be seeking from a listing on Nasdaq Stockholm. The opportunity to become part of PayPal was too good to pass up. "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 omni-channel commerce solutions in Australia, U.K. and U.S". Close sources claim that the IPO filing forced Paypal management to speed up the acquisition process. J.P. Morgan Securities plc is acting as sole financial adviser to iZettle, while Gernandt & Danielsson is acting as its legal adviser.

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