Izettle Investment

iZettle, a Swedish fintech company, attracted significant investment throughout its lifespan, ultimately culminating in its acquisition by PayPal in 2018. These investments fueled its rapid expansion and innovation in the mobile point-of-sale (mPOS) space.

Initially, iZettle secured seed funding from various angel investors and venture capital firms. This early capital was crucial for developing its core technology – a small card reader that plugged into smartphones and tablets, allowing small businesses to accept card payments on the go. Unlike traditional POS systems, iZettle aimed to democratize payment acceptance for micro-businesses, sole traders, and pop-up shops who were previously excluded due to high costs and complex setups.

As iZettle demonstrated traction and expanded its user base, it attracted larger funding rounds. Notable investors included Creandum, Index Ventures, and Northzone. These established venture capital firms brought not only capital but also valuable expertise and networks, helping iZettle navigate the complexities of scaling a global business. The funding was used to expand its geographic reach, develop new features, and strengthen its marketing efforts. For example, iZettle expanded into markets like the UK, Germany, Spain, and Brazil, tailoring its product to the specific needs of each region.

Furthermore, iZettle strategically used investments to develop complementary services beyond basic payment processing. They introduced features like inventory management, sales reporting, and customer relationship management (CRM) tools, transforming iZettle from a simple payment processor into a comprehensive business management platform for small businesses. This expansion of services increased the value proposition for iZettle’s users and attracted even more investment.

A particularly significant funding round came in 2015, when iZettle secured €60 million from Intel Capital, Zouk Capital, and Dawn Capital, among others. This round valued the company at over $500 million and signaled growing confidence in iZettle’s potential to disrupt the payments industry. The investment was specifically earmarked for further international expansion and product development.

The ultimate culmination of iZettle’s investment journey was its acquisition by PayPal for $2.2 billion in 2018. This acquisition was a testament to iZettle’s success in creating a compelling solution for small businesses and its ability to challenge established players in the payments market. For PayPal, the acquisition provided access to iZettle’s European presence, its innovative hardware and software solutions, and its large customer base of small businesses. It also allowed PayPal to better compete with Square, another major player in the mPOS space.

In conclusion, strategic investments were vital to iZettle’s growth and success. The initial seed funding allowed them to develop their core technology, while subsequent larger rounds enabled them to expand geographically, develop new features, and ultimately build a valuable and attractive business that was acquired by PayPal.