European mobile payments company iZettle announced today that it raised $31.4 million in funding in a new Series B round, led by Greylock Partners and Northzone. The round also includes MasterCard, SEB Private Equity and existing Series A investors Index Ventures and Creandum, and brings iZettle’s total funding to date to $46.7 million. That’s a healthy war chest from which the Swedish startup can draw to continue funding its international expansion.
With this funding, iZettle intends to bring its service to additional markets in Europe, and beyond in other countries where chip cards are prevalent. The opportunities are huge, since chip cards are in use in the majority of developed and developing countries outside of the U.S., where swipe cards are still dominant and mobile payments success story Square has a significant foothold.
“Looking at the European market, there are 20 million companies across Europe that don’t have any kind of point of sales device, so it’s an obvious market to target,” iZettle CEO and founder Jacob de Geer said in an interview. “In Europe, it’s actually mandated in terms of the point of sales systems being distributed here are chip-enabled.”
iZettle has already been focusing on expansion this year, with a beta run begun in the UK in May, and expansion to Denmark, Finland and Norway in February. The company has seen a 10 percent overall increase in the number of POS terminals in use in the Nordic European countries since its launch, which is a good sign that it’s striking a chord with merchants.
In terms of competition, iZettle has little to none in the markets where it’s currently operating. Expansion could mean butting heads with other players, but most other potential competitors are still dealing in swipe-based dongles, like PayPal Here and Moneris’ Payd. The head start iZettle has in terms of accepting chip-and-pin technology could help it catch the rest of the field flat-footed, especially in emerging markets like Asia and South America where its use is seeing growing adoption.
This investment is a sure sign that iZettle is on the right track with its approach, and should help the company keep up the rapid pace with which it is growing and adding on features (including an API released earlier this week). This is definitely one of the companies to watch in the rapidly growing mobile payments space.
