Published: Fri, May 18, 2018
Money | By Bruce West

PayPal acquires Swedish payments firm iZettle

PayPal acquires Swedish payments firm iZettle

IZettle Chief Executive Officer Jacob de Geer on May 8 said the company was "fully focused" on the IPO plan announced that morning.

The decision from iZettle comes just over a month after Spotify became arguably Europe's largest startup to refuse to sell up to a USA or Asian investor, listing on the New York Stock Exchange for about $27 billion.

The acquisition is the largest in PayPal's history and is for a company that is still making a loss.

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. It has since expanded into software and financing services to support small businesses.

PayPal, the American company that operates worldwide in the online payment space, is acquiring iZettle, a Stockholm-based company that offers a range of payment and commerce solutions.

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". Today, small-business owners around the world use iZettle's powerfully simple services to improve the speed and ease of payments at checkout, business management, sales analytics, customer engagement, and funding.

It was announced ten days ago that Sweden's iZettle was planning to go public provoked cheers among European tech boosters, but that excitement proved to be short-lived. IZettle does not now face too much direct competition from its main rival, the NASDAQ-listed Square, as the companies' operations only really overlap in the UK. The company is expected to process payments worth $ 6 billion in 2018 and generate $ 165 million in gross revenue.

The transaction, which is expected to be Dollars 0.01 dilutive to PayPal full year adjusted earnings per share, is subject to the usual closing conditions, including regulatory approvals.

The company is still operating at a loss, according to IPO documentation.

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