iZettle raises $63M more at a $500M valuation to expand from mobile payments
The world of mobile payments continues to consolidate and mature, and today one of the leading players among European mobile payments startups has raised a significant round of money to help keep itself on top. iZettle …
Context & Ripple Effects
This January 2017 round is one stop on a steep valuation curve for iZettle: the company had already raised €60M in 2015 and used part of it to launch an SMB cash advance service ($67M round and cash advance launch), signaling early that hardware-led mobile payments would be a wedge into broader financial services. Eleven months later it closed a Series D reportedly near double this valuation ($47M at a reported $950M).
The endpoint of that arc is what makes this round worth reading closely: by May 2018 iZettle had filed for a Nasdaq Stockholm IPO at roughly $1.1B, only to be bought instead by PayPal for $2.2B all-cash — PayPal's largest-ever deal. The $63M raised here funded the expansion beyond payments that made the company valuable enough to acquire.
First-order effects
- iZettle gets the capital to move past its core card-reader business into adjacent SMB financial services, building on the lending playbook it started with its 2015 cash advance product.
- European SMB merchants gain a better-funded alternative to Square-style providers, with iZettle able to subsidize hardware and expand its services bundle faster.
Second-order effects
- Rival London-based SumUp answers with progressively larger war chests of its own — roughly $895M in 2021 and €285M in late 2023 — competing on the same read-pay-lend bundle for millions of SMBs.
- Investors reprice the category quickly: iZettle's valuation roughly doubles within a year of this round, pulling more growth capital toward European payments startups.
Third-order effects
- Independent European SMB payments players face a structural fork — list publicly or sell to a global platform — which iZettle resolved by abandoning its planned Stockholm IPO for the PayPal exit.
- If the pattern holds, mobile point-of-sale hardware becomes a customer-acquisition cost for lending and banking services, with device economics judged on lifetime financial-services revenue rather than reader sales.
The trend: European SMB payments startups are scaling from card readers into full financial-services platforms, with the strongest either going public or being absorbed by global acquirers like PayPal.