Published: Fri, May 18, 2018
Money | By Hannah Jacobs

PayPal agrees to buy Sweden's iZettle in $2.2 billion deal

PayPal agrees to buy Sweden's iZettle in $2.2 billion deal

IZettle sells card readers that connect to smartphones or tablets, helping small companies to avoid some of the prohibitive costs associated with taking card payments.

The Wall Street Journal said PayPal would pay about $2.2bn (£1.6bn), which Sky News said was more than iZettle had hoped to raise though a listing. 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.

Paypal's acquisition of iZettle has also come at a time when the latter has already filed for an IPO in the Stockholm stock market for raising almost $227 million.

Dan Schulman said in the statement, "iZettle and PayPal are a strong strategic fit, with a shared mission, values, and culture - and complementary product offerings and geographies".

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.

The acquisition, which is the largest in PayPal's history, will potentially catapult the company into hundreds of thousands of bricks-and-mortar retailers around the world.

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

Upon closing of the deal, PayPal will gain in-store capabilities in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden. The company has grown its revenues at a CAGR of approximately 60% from 2015 to 2017. iZettle expects to reach EBITDA profitability by 2020 on a standalone basis.

Mobile and web payments processing company Braintree became part of PayPal's business in 2013, with PayPal paying $800 million to close the deal. "But this is a very exciting way for the company to continue its vision".

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