PayPal, which remains limited in its point-of-sale offerings, has agreed to a $2.2bn all-cash deal for the Swedish start-up which offers cheap, simple card readers to small businesses in the vein of Stripe and Jack Dorsey's Square.
The deal will enable PayPal to expand its presence in in-store payments globally, and will mark the largest-ever acquisition by the U.S. fintech giant, Reuters reports.
iZettle was founded in 2010 by Jacob de Geer and Magnus Nilsson with a mission to help small businesses and revolutionized mobile payments with the world's first mini chip card reader and software for mobile devices. The chip-card reader and its app for smartphone-based mobile commerce meet global security standards. iZettle's service is available in 12 countries which includes United Kingdom, Finland, Denmark, Germany, Italy, Netherlands, Spain, Italy, Germany, and Brazil, among others.
In a statement on its website, iZettle CEO and co-founder Jacob de Geer welcomed the deal, which he said would allow the company to "join forces" with PayPal.
iZettle expects to earn revenue of roughly $165 million in 2018 and process about $6 billion worth of transactions on its platform, according to a press release from the two companies.
Once the acquisition closes, Jacob de Geer will continue to lead iZettle, which will operate as an integral part of PayPal's merchant services offering, reporting to PayPal's Chief Operating Officer Bill Ready. iZettle's experienced management team, who have a demonstrated track record of scaling at pace, will continue running the business, ensuring continuity for customers, employees and partners. "Together, we will help small businesses around the world grow and thrive in the global digital economy".
"When we think about the combinations and capabilities of PayPal and iZettle", Paypal's Schulman said, they "set us apart from anyone else".
The Stockholm-based company had been aiming to achieve a valuation of $1.1bn, but was presented with double that amount by PayPal.
Buying iZettle will expand PayPal's reach into shops in Brazil, Denmark, Finland, France, Germany, Italy, Mexico, the Netherlands, Norway, Spain and Sweden.
The deal will have forced PayPal's hand for years.