PayPal acquires Swedish payments startup iZettle

PayPal acquires Sweden's iZettle in $2.2 billion deal to help small businesses around the world

PayPal acquires Swedish payments startup iZettle

PayPal Holdings Inc (PYPL.O) is in advanced talks to buy iZettle AB (IPO-IZET.ST) in a deal that could value the Swedish fintech at around $2.2 billion, the Wall Street Journal reported on Thursday, citing sources familiar with the matter, APA reports quoting Reuters.

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

iZettle, which is based in Sweden, said last week it would list an IPO on the Nasdaq in Stockholm sometime this year, and said at the time it would not be pursuing a sale as alternative to an IPO.

With the agreement, PayPay gains access to almost 500,000 small businesses that use iZettle's technology to process customer transactions involving credit cards.




The iZettle platform for handling retail transactions is used by almost a half million merchants, according to PayPal.

The company has a presence in 11 countries and offers other services for small businesses such as lending.

"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", PayPal chief executive Dan Schulman said in a release. 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.

PayPal said it hopes to be able to reap the advantages of the merger nearly immediately in certain areas, and that the financial benefits will kick in shortly after the deal closes, expected in the third quarter. The two companies will continue to operate independently until close.

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