PayPal Holdings, Inc.announced today that it has agreed to acquire Stockholm based iZettle, the leading small business commerce platform in Europe and Latin America, for $2.2Bn.
Upon closing, PayPal gains in-store capabilities in the following 11 markets: Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden. 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 acquisition of iZettle significantly expands PayPal’s in-store presence, strengthening PayPal’s platform to help millions of small businesses around the world grow and thrive in an omnichannel retail environment.
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.
Once the acquisition closes, Jacob de Geer will continue to lead iZettle, which will operate as an integral part of PayPal’s merchant services offering, reporting to PayPal’s Chief Operating Officer Bill Ready. iZettle’s experienced management team, who have a demonstrated track record of scaling at pace, will continue running the business, ensuring continuity for customers, employees and partners. Upon closing, iZettle will become the European center of excellence for PayPal’s in-store product and services offerings.
The deal is expected to close in the third quarter of 2018, as it is still subject to customary closing conditions, including regulatory approvals. The two companies will continue to operate independently until close.
“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,” said PayPal President and CEO Dan Schulman. “iZettle and PayPal are a strategic fit, with a shared mission, values and culture—and complementary product offerings and geographies. In today’s digital world, consumers want to be able to buy when, where and how they want. With nearly 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.”
“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 iZettle CEO Jacob de Geer. “The combination of iZettle and PayPal will provide tremendous benefits to our merchants who will have access to an even wider range of tools to help them get paid, sell smarter and grow.”
iZettle expects to generate gross revenues of approximately $165 million in 2018, with approximately $6Bn of total payment volume (TPV) expected to be processed on its platform. 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.
Jacob de Geer and Magnus Nilsson founded iZettle in April 2010 and launched their first app and card reader in 2011.
iZettle technology transdorms smartphones and tablets into mobile point of sale terminals with the help of chip card and magnetic stripe readers. With the system, credit and debit card information is not stored in the phone , but it is processed through the encrypted connection of iZettle. The phone works like a secure modem. After the transaction is completed, buyers can choose to have a photo receipt of what they bought by email or in print.
PayPal reached around 227 million users worldwide in over 200 markets in 20017. The company reached the $451.000 million in operations last year, a 27% more than in 2016.
PayPalapp called PayPal Here is a mobile solution that allows small businesses to accept multiple forms of payments using a free mobile app and a fully-encrypted thumb-sized card reader. PayPal Here enables anyone with an iPhone or Android device to accept credit/debit cards and PayPal payments on-the-go, while getting fast access to their funds through their PayPal account.
Image over the headline.- Left to right: Jacob de Geer, CEO and Co-Founder of iZettle, Dan Schulman, President and CEO of PayPal, and Bill Ready, EVP, Chief Operating Officer of PayPal. Photo: Business Wire.
