PayPal acquires Swedish startup iZettle for $2.2 billion ahead of IPO

PayPal acquires Swedish startup iZettle for $2.2 billion ahead of IPO

PayPal acquires Swedish startup iZettle for $2.2 billion ahead of IPO

PayPal has bought iZettle, a Swedish mobile payments company that sells a card-reader aimed at small businesses, for $2.2bn (£1.6bn).

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.

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Schulman described the merging of iZettle and PayPal as a "strategic fit" combining shared values and culture with complementary product offerings and geographies. "With almost half a million merchants on their platform, Jacob de Geer and his team add best-in-class capabilities and talent that will expand PayPal's market opportunity to be a global one-stop solution for omnichannel commerce".

Since Paypal now does not have a strong offline presence in these markets, it will look to leverage on iZettle to penetrate into these markets. It has since expanded into financing services, with a presence in Brazil, Mexico and Europe.

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PayPal also gains near-term in-store expansion opportunities into other existing PayPal markets, and acceleration of omnichannel commerce solutions in Australia, U.K. and U.S.

Sky News shares the scoop on Paypal's potential deal. Paypal expects this huge bet to pay off by giving it a formidable presence in the point-of-sales market and a better standing against strong competitors such as Square Inc and Stripe Inc.

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"The IPO will provide us with improved access to capital markets to facilitate our continued growth and help us strengthen our profile with merchants, key business partners and in the fierce competition for talent". The deal will be an all-cash deal and is expected to be closed by third quarter of the current financial year.

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