IZettle's Evening Sale to PayPal a $2.2 Billion Change of Heart

PayPal President and CEO Dan Schulman

PayPal President and CEO Dan Schulman

After the acquisition, Jacob de Geer will continue to lead iZettle, and will report to PayPal COO Bill Ready.

Until now, iZettle has mainly operated in Europe and Latin America but, with PayPal's backing, the possibility of a stronger entrance into the United States market becomes more plausible.

With this acquisition, which will be done in all-cash, PayPal will have a presence in stores in 11 markets, both in Europe and Latin America, BBC says.

Stockholm-based iZettle is best known for offering small businesses a mini credit card reader that can turn smartphones and tablets into payment registers.

"Small businesses increasingly want a full suite of capabilities across channels, a one-stop stop", Dan Schulman, chief executive officer of PayPal (pypl), said in an interview.

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The Shanghai Composite index dropped 0.3 percent to 3,183.28 and shares in Southeast Asia were lower while Taiwan advanced. The rise in bond yields pulled down shares in real estate investment trusts and other high-dividend-paying stocks.

Up to now, although it has a limited presence in the area of point-of-sale, it doesn't have the same infrastructure of its potential rivals, whereas iZettle is becoming increasingly popular for pop-ups, markets and small businesses where a landline connected merchant is less appealing. That price tag offers the first clue as to why iZettle took the money rather than pursuing the IPO, which was expected to give the payment company a valuation just north of $1.1 billion. "iZettle and PayPal are a strategic fit, with a shared mission, values and culture-and complementary product offerings and geographies". Swift Financial provides small business owners with working capital and was acquired for an undisclosed amount.

Buying iZettle will expand PayPal's reach into shops in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden.

"IZettle's goal was to go for an IPO, there was no real dual track", said Johan Brenner, general partner at Creandum, an investor in iZettle. The company is expected to process payments worth $ 6 billion in 2018 and generate $ 165 million in gross revenue.

The $2.2 billion PayPal is putting up for iZettle is the San Jose, California-based company's biggest ever deal, according to data compiled by Bloomberg. The completion of this transaction is subject to customary closing conditions, including regulatory approvals.

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