Архив метки: De Geer

Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More

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Just days after releasing an API to integrate its payment platform into third-party apps, iZettle, known as the “Square of Europe” for its dongle-based iOS mobile payment system, has even more news: it has just completed a  €25 million ($31.4 million) Series B round of funding as part of its bid to become the biggest mobile payments platform in the region. The round was led by new investors Greylock Partners and Northzone, with participation from others — including the eye-catching news that payment giant MasterCard is now an investor — along with other new backer SEB Private Equity, and previous investors Index Ventures and Creandum.

The funding takes the total investment in the company to $46.7 million, and Jacob de Geer, iZettle’s co-founder and CEO, says it will be used for product development, and to continue to build out its mobile payments service in Europe — currently available in Scandinavia and trialling in the UK. “Our priority is to get the UK fully launched, and then look at other major markets like Spain, Italy, France and Germany to continue building up our transaction volume,” he told TechCrunch in an interview. “We’re not interested in the U.S. They’re doing really well with Square and others.”

Since starting its first services in its home market of Sweden in August 2011, iZettle has picked up 50,000 merchants using its system — a far smaller number than the 2 million milestone revealed yesterday by Square. But iZettle says that potentially there are 20 million merchants in Europe — that’s the number who currently do not take card payments for their services, putting to one side targeting those who already can — who could be using its service to accept card-based payments.

In its focus on Europe, iZettle is going after a market that has yet to be tackled by PayPal’s Here (although it is looking at other payment routes), or Square (which is reportedly looking to enter Europe itself); but that does have others also looking to do more dongle-based mobile payments: they include mPowa, and a Square clone from the Samwer brothers that may be called PayLeven (that would be its third re-branding and the Samwer’s investment vehicle Rocket Internet has so far declined to comment to TechCrunch about what its strategy is in the venture — we’re asking again now).

iZettle is not disclosing its valuation on the back of the funding news today. Square, by comparison, has raised $141 million to date and has a valuation of $4 billion.

Unlike other dongle-based mobile payment services like Square and PayPal’s Here which use a card’s swipe strip for processing, iZettle has focused on transactions (each charged a flat 2.75% commission on MasterCard, Visa and Diners Club; 3.75 for AmEx) using chips embedded in the cards: chips are now ubiquitous in Europe and are considered more tamper-proof than the strips. De Geer believes that will help the company bring on both more merchants and consumers to the service as it looks to take its offering mass market. “Security comes built into that,” he says.

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,” Laurel Bowden, Greylock’s partner in London who is joining iZettle’s board of directors, said in a statement. “They’ve proved they’re ready to step up their game in this very complex and competitive industry.”

The fact that iZettle is based around the chip technology, and that it has a firm commitment to becoming the name synonymous with mobile payments in Europe, makes the company also potentially interesting as either a partner, or even an outright acquisition target, for those larger U.S.-based payment companies that are looking for a way of entering a new market.

De Geer says that the company has already even engaged in those kinds of conversations on a casual basis — but he emphasizes that nothing has advanced into more serious negotiations yet. “It’s not something that we’ve been pursuing actively at this point,” he says.

Aside from building its own user footprint and partnering with other, complementary mobile players, there is another direction that iZettle is likely to explore in the future: the idea of linking up its payments services with other parts of the mobile payment ecosystem, which includes services like product discover, customer loyalty programs, and other rewards services: after all it’s a natural progression to take a consumer from one function to the other, and it makes it much more likely that the consumer will complete transactions if you make it as easy as possible for him to do so.

iZettle has an interesting arrangement that could point to its first partner in such a new venture. It actually shares a Stockholm office with Wrapp, the mobile gift card aggregator that recently entered the U.S. market and has similar ambitions to become the default service of its kind across Europe.

“We are very interested in what Wrapp does in terms of gift cards. They are really disrupting with the gift card market, and that’s all they focus on so that makes them a good partner for what we could do,” says de Geer. “At the end of the day, for all of us, it’s all about adding value for our merchants.”


Focus Squarely On Europe, Mobile Payments Startup iZettle Gets $31.4M From Greylock, MasterCard & More

iZettle, The ‘Square Of Europe’, Checks Out Mobile Payments In The UK With 3,000 Free Readers For SMBs

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With Square yet to reveal when or where it might offer its mobile payment service in Europe, and PayPal apparently still only talking with would-be partners, the door is wide open for more local players to jump in and pick up some market share. Sweden’s iZettle, which often gets compared to Square, is now doing just that: today it is launching its iOS, dongle-based mobile payment service to the UK, four months after its pan-nordic live launch, and as it is preparing to launch an Android version of its product later this year.

iZettle kicking off its service by giving away 3,000 card readers to small businesses and sole traders in the country as part of its invitation-only beta, which it is running in cooperation with MasterCard, American Express and Diners Club. In its still brief life, it has seen some decent traction in Sweden, Norway, Denmark and Finland, where it now has 50,000 active merchants on its network.

iZettle is filling a practical need in the current market. The initial aim of the service, according to Jacob de Geer, the founder and CEO, is to target not those merchants that already take card payments, but those who have never signed on to using anything other than checks, cash and invoices to accept payments. There are roughly 20 million small businesses in Europe that fall into this category, he says, with the “uncarded” ranging from sole traders like carpenters to small independent cafes. “We’re not trying to go after those with existing infrastructure because switching costs are too high,” he says.

De Geer will not yet reveal the total number or value of transactions or how many consumers that have used the service to date, except to say that the company is building out its infrastructure to keep up with the demand and has grown by 10 percent in recent months. What’s interesting is that, for now at least, the service seems to be attracting high-value transactions: De Geer says the average value of a transaction is €60 ($76), compared to between €10 and €15 for the average NFC transaction in the Nordic region. (In comparison, he notes that Square transacts between $8-10 per day on any given reader, but that’s an average number and it has picked up a huge number of merchants now.)

The iZettle service works similar to PayPal’s Here and Square, in that a merchant plugs a card-reading dongle into an iOS device to process a card payment using an app downloaded to the device. Instead of reading the magnetic strip on the back of the card, iZettle reads the chip — these are now near-ubiquitous in Europe and tend to be more secure. Like other card payment services, you sign on the device screen to complete a payment, and the funds are deposited in a merchant account the next day.

Similar to other payment services iZettle works on a commission basis — in its case a percentage on each transaction, with that percentage varying by country. It actually dropped a transaction fee it used to take only days ago — perhaps a sign of how the area is heating up and so offering more competitive offerings is essential.

For now, the service is only on iOS but De Geer says that Android is coming soon, “this year for sure.” He says that the delay was due to (surprise!) fragmentation across too many versions of the platform, and too many devices. But the evolution to Ice Cream Sandwich — the latest OS — is definitely making things more standardized, he notes.

One expansion that is not coming soon is to the U.S. Not only do companies like Square and Here have a lot of early business sewn up, but he also notes that “The U.S. is not too interesting for us given that they use the mag stripe and we focus on chip-and-PIN services.”

More interesting, he says, are markets like Asia and Latin America, where there is good chip-card penetration but card payment facilities are still relatively low among smaller businesses. Still, the next launches are likely to be in Europe, with Germany, France, Italy and Spain all on De Geer’s roadmap, with “one or two of those” expected to come online this summer. To date, iZettle has received venture funding of $16.4 million from Index, Creandum and others to fund that expansion.

Interested companies can either register a request through iZettle’s web site, or via its iTunes app, and the first 3,000 will get a free card reader to get started.


iZettle, The ‘Square Of Europe’, Checks Out Mobile Payments In The UK With 3,000 Free Readers For SMBs