Published: Fri, May 18, 2018
Research | By Jennifer Evans

PayPal to buy Square competitor iZettle for $2.2B

PayPal to buy Square competitor iZettle for $2.2B

Schulman described the merging of iZettle and PayPal as a "strategic fit" combining shared values and culture with complementary product offerings and geographies.

iZettle was founded in 2010 with an aim to offer plethora of affordable financial services like point-of-sales and partner application to small businesses. In today's digital world, consumers want to be able to buy when, where and how they want.

PayPal is preparing to take over Swedish payments app iZettle, just a week after it announced plans to float.

At close, PayPal will get in-store capabilities in 11 markets, including Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden. The company's CEO, Jacob de Geer, will continue to lead the business under PayPal. PayPal also gains near-term in-store expansion opportunities into other existing PayPal markets, and acceleration of omnichannel commerce solutions in Australia, U.K. and U.S.

The deal is the biggest ever for San Jose, California-based PayPal and will help it compete with Square Inc., which made a name for itself by helping small businesses and food-truck vendors conduct credit card and mobile transactions. The transaction is expected to close in the third quarter of 2018.

PayPal was even cast aside by EBay earlier this year in favour of Dutch fintech startup Adyen, which is also thought to be plotting an IPO with a valuation of more than $1bn.

For 2018, iZettle expects to generate gross revenues of United States dollars 165 million, and to process USD 6 billion worth of total payment volume (TPV) on its platform.

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