PayPal stumps up US$2.2bn for iZettle

PayPal stumps up US$2.2bn for iZettle

PayPal has agreed to buy Swedish payments group iZettle for $2.2bn, in a deal that will "significantly" expand its in-store presence.

The deal announced Thursday marks the largest acquisition in PayPal's 20-year history and intensifies its competition with Square, a payment processor started by Twitter co-founder and CEO Jack Dorsey.

Based in Stockholm, iZettle was founded in 2010 by Jacob de Geer and Magnus Nilsson with a mission to help small businesses "succeed in a world of giants" by levelling the playing field against bigger retailers. 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.

IZettle has almost half a million merchants on its platform and expects to generate gross revenues of $165m (£122m) in 2018, processing total payments of around $6bn (£4.4bn). The deal has been finalized by the company and PayPal would be paying $2.2 Billion for the acquisition.

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The combination of PayPal and iZettle brings together iZettle's in-store expertise, digital marketing strength and mobile point-of-sale technology with PayPal's global scale, online and mobile payments leadership and trusted brand reputation to support merchants and consumers in more ways.

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".

Stockholm-based iZettle is present in 11 countries. This is not the first time PayPal acquires startups with brilliant tech, but in this case, iZettle would have become a potential rival, had it raised enough funds via IPO. The company forecast reaching EBITDA profitability by 2020 on a standalone basis.

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

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