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. PayPal operates in more than 200 countries across the world. 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.
The price being paid by PayPal - itself valued at more than $90bn (£66bn) - is double the valuation that iZettle was reported to be seeking from a listing on Nasdaq Stockholm.
PayPal, based in San Jose, California, says Stockholm-based iZettle is on pace to process about $6 billion in payments this year.
PayPal president and chief executive Dan Schulman said: "Small businesses are the engine of the global economy and we are continuing to expand our platform to help them compete and win online, in-store and via mobile".More news: Two Nepalese Sherpas break world records with Mount Everest climb
The company indicated earlier this month it would hold an initial public offering, but told Bloomberg that the PayPal merger aligns with the company's goals.
With iZettle, Paypal will have access to hundreds of thousands of brick-and-mortar retailers. The company has grown its revenues at a CAGR of approximately 60% from 2015 to 2017. iZettle expects to reach EBITDA profitability by 2020 on a standalone basis. This is not the first time PayPal acquires startups with brilliant tech, but in this case, iZettle would have become a potential rival, had it raised enough funds via IPO.
PayPal hopes the transaction will close in the third quarter, the company announced. "But this is a very exciting way for the company to continue its vision".