In a significant development for the world of mobile payments, today one of the leading players among European mobile payments startups has managed to raise a considerable amount of funds to be at the top of its game. This is iZettle, a Swedish company that offers a card reader which works with your smartphone or tablet, as well as a suite of financial services for the small businesses, having raised €60 million ($63 million) in new funding according to its announcement today.
And that’s not all. iZettle has also appointed a new CFO, Maria Hedengren, who has actually been with the company since last month, joining from online gambling specialist NetEnt.
According to Jacob de Geer, the founder, and CEO of the company, €45 million of the funding raked in is in the form of debt from Victory Park Capital, the firm that has backed a number of other financial startups. The remaining €15 million comes from existing investors (there are 16 in all, including Intel, Index, MasterCard and American Express) and is an extension of the company’s Series D from 2015.
As per TechCrunch’s report, iZettle’s valuation remains at $500 million as before.
De Geer said that the concept driving the funding is to use it in part for acquisitions, with a special emphasis on continuing to expand its business into more services beyond mobile payments across its markets (iZettle today is live across 10 countries in Europe, as well as Brazil and Mexico). He continued,
Part of this will be used for acquisitions. We’re looking at many different things. We have gone from being a mobile payments company to providing financial solutions for small businesses.
Last year, iZettle acquired intelligentpos to add inventory, loyalty programs, and customer flow analytics to its platform. De Geer also said that acquiring companies would also tap into a wider trend in the area of financial technology, adding,
There are a few big players in the payments world right now, but also many small companies, struggling to find the right and healthy business model. There are interesting ways of combining these companies today.
There are so many opportunities for us to leverage this.
Although Square entered the public markets in the U.S. before it turned profitable and has seen its stock rollercoaster, de Geer mentioned that his company is not getting pressure from investors to do the same. He said,
European companies do have a slightly different approach when it comes to profitability and going public when compared to U.S. companies. When you consider the amount of capital raised and the valuations in the U.S., typically you don’t see this in Europe. Even though iZettle is a company that has used VC money for growth purposes, it can’t be compared to its U.S. equivalents. A clear path to profitability by the end of 2017 is one of our core expectations.
Whatever the case, a new CFO from a public company at the helm of affairs is one definite sign of how the company intends to scale in its next phase. Gordon Watson, Partner at Victory Park Capital, said in a statement,
We have been following the impressive growth of iZettle since its inception. iZettle is an innovator and a clear market leader in Europe and we want to be part of its next chapter of growth. 2017 promises to be a vibrant and buoyant time for both iZettle and its market.