PayPal is making a big splash into in-person sales with the acquisition if iZettle, the Swedish point-of-sale device startup.
As PayPal is paying $2.2 billion in cash, this is its biggest deal to date. It appears that the online payments leader is looking to compete with Square for the small businesses and tradesmen market, where iZettle has made a name for itself as a cheaper way to accept card payments.
iZettle co-founder and CEO Jacob de Geer will stay onboard to lead iZettle along with most of the executive team. PayPal said in a statement that “iZettle will become the European centre of excellence for PayPal’s in-store product and services offerings”.
This looks to be a good deal for the fintech startup; just days before the deal was announced, the company had filed for an IPO on the Stockholm Nasdaq exchange, planning a fundraising campaign which would have seen the company valued at $1.1 billion.
PayPal has been working for years on expanding from online payments to also being a leader in the point-of-sale space, however Jack Dorsey’s Square has, until now, held that crown in the US. iZettle is however gaining much ground in other markets, including the UK, and currently has over half a million merchants on its platform. The deal should give iZettle, which is still loss-making, an opportunity to grow at a faster pace.
“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 President and CEO Dan Schulman said at the announcement.
This deal looks like a great fit for PayPal as the company graduates from startup to a mature financial services company. Also, it’s another example of how fintech is starting to produce high-value deals. It surely won’t be the last of the year.