PayPal is paying $2.2bn to buy iZettle

Paypal buys Izettle for £1.66bn ( $2.2bn) to buy Swedish payments start-up iZettle, just before it was set to become the biggest fintech in Europe to list.

The US PayPal giant wanted this deal so badly that they are paying double the amount that iZettle, which is aiming at Europe and Latin America, was targeting in its IPO.

iZettle would be the latest Swedish tech bought by a mega US rival after Skype and Mojang were bought by Microsoft before being able to list. Even Spotify, from Stockholm, recently listed in New York as its centre of gravity moves away from Sweden.

Dan Schulman, Paypal’s president and CEO said “ The retail world is increasingly becoming a multichannel world as the mobile phone has blurred the distinction between online and offline sales. Small businesses are searching for one-stop-shop solutions that can solve all their payment requirements.”

iZettle is known for its portable point of sale credit card readers which can plug into a smartphone or tablet to allow businesses of any size to quickly and easily begin accepting card or contactless payments used by vendors from coffee shops to the Big Issue, homeless magazine sellers and now has cast its net on the e-commerce operations. The deal could see Paypal move out of the online world and become a recognised form of payment in shops using iZettle’s card readers, competing with the likes of Apple Pay.

Jacob de Geer, CEO of iZettle welcomed the deal , which should allow the company to “join forces” with PayPal and said “the opportunity to become part of PayPal was too good to pass up, the global scale and 19 million merchant relationships that PayPal has enables us to move faster and reach further than ever before. Combined with the iZettle brand, and its capabilities and talent mean we are ready to level the playing field for small businesses all around the world”. By joining the PayPal family we’ll become iZettle with superpowers and jump a fast track to realise our vision.”

iZettle was hoping to raise $227m on the Stockholm Nasdaq exchange, which would have valued the company only $1.1m.