Time is money with all businesses, but with mobile payment services it seems like everyday there is a new way to access it, exchange it and make it easier to collect. A few days ago the European equivalent of Square, iZettle released an API to integrate its payment platform into third-party apps, and today it announces that it has acquired a $31.4 million Series B round of funding. The round was led by new investors Greylock Partners and Northzone, with participation from MasterCard, SEB Private Equity, and previous investors Index Ventures and Creandum.
This news comes as Square has done expanding and hiring this week and even teased that it was gearing up for an international expansion.
The funding brings company capital to $46.7 million, and this round is dedicated toward product development, and expansion in Europe. Right now iZettle is available in Scandinavia and trialling into the UK.
Founded in August, iZettle has gained 50,000 merchants, while Square announced this week that it surpassed the 2 million milestone. iZettle estimates that there are potentially t20 million merchants in Europe that opt not to take cards because of the price of hardware, fees, connectivity and time to clear the transactions with the bank. All of these are ideal targets for mobile payment services, in addition to those that have systems and want a faster, easier option for their tech-savvy customers.
While PayPal's Here and Square have a strong dongle component, iZettle has focused on transactions (each charged a flat 2.75% commission on MasterCard, Visa and Diners Club and 3.75% for AmEx) using chips embedded in the cards to run the transaction. Unlike in the US, chips are now ubiquitous in European cards. Its unique IP — an interesting mix of software technology with hardware thrown in — is also what has attracted this latest round of investment.
"iZettle is the first and only company to develop an affordable chip-card reader and app for smartphone-based mobile commerce that meets all of the rigorous international security requirements," said Laurel Bowden, Greylock's partner in London who is joining iZettle's board of directors, in a statement. "They've proved they're ready to step up their game in this very complex and competitive industry."
iZettle's chip and signature solution has popular among small business owners and individual service providers, increasing the number of point of sale (POS) credit card terminals in the Nordics by 10% started operations.
iZettle is approved for use with Europay, MasterCard and VISA, and compliant with the Payment Card Industry Data Security Standard (PCI-DSS). No sensitive data is ever stored on the mobile device or iZettle reader, and all data traffic is encrypted.