TECH JOGGLE

PayPal confirms that it is buying payments startup iZettle for $2.2B in an all-cash deal

Posted In News - By ADMIN on Friday, May 18th, 2018 With No Comments »

PayPal is taking its biggest bet yet on point-of-sale transactions, small businesses and markets outside of the U.S. as it looks to raise its game against Square, Stripe and others in the world of payments: The company has confirmed that it is buying iZettle — the Stockholm-based payments provider commonly referred to as the “Square of Europe” — for $2.2 billion in an all-cash deal.

Image: techcrunch

The deal — which is expected to close in Q3 2018 — will see iZettle’s  co-founder and CEO Jacob de Geer stay on to lead iZettle. He will report to PayPal’s  COO Bill Ready. Others in iZettle’s exec team will also stay on to run the business, which will become a “center of excellence” for in-store and offline payments in Europe, PayPal said.

The timing of the deal is notable: It comes on the heels of iZettle filing for an IPO earlier this month (just nine days ago, in fact) in its own bid to scale out its business: iZettle had planned to raise $227 million on the Stockholm Nasdaq exchange, which would have valued the company at around $1.1 billion.

From what I understand from sources, the two had been talking “for years.” I guess the IPO filing suddenly gave those talks a new kind of urgency. And maybe double so: The news was supposed to be announced on Friday, but after rumors started to leak out today the company has decided to come out with it officially.

PayPal itself has a market cap of around $94 billion and in its last earnings said it had $7.8 billion in cash, cash equivalents and investments — giving it ample funds for this deal.

iZettle becomes PayPal’s biggest-ever transaction. For some context, in 2015 PayPal acquired money-transfer startup Xoom for $890 million, and when it was still a part of eBay, in 2013, it acquired Braintree and its Venmo business for $800 million.

iZettle has operations in 12 markets, including several in northern Europe and Mexico in Latin America, where PayPal doesn’t have an extensive offline presence, such as Brazil, Denmark, Finland, France, Germany, Italy, Mexico, Netherlands, Norway, Spain and Sweden. (Its Latin American expansion was made by way of a strategic investment from the Spanish bank Santander.)

FOR ENTIRE ARTICLE CLICK LINK

 

About -