European mobile payments processor iZettle has announced a fresh €60 million ($67 million) raise. The round was led by Intel Capital and Zouk Capital, both existing investors, and takes the company’s funding to almost €150 million ($168 million).
While Jack Dorsey’s Square has been setting out to disrupt the epayments market for small to medium-sized businesses in North America and Japan, iZettle has been doing the same in its native Sweden, as well as Finland, Denmark, Norway, U.K., France, Germany, Netherlands, Spain, Brazil, and Mexico.
As with Square, iZettle offers merchants a physical card reader and app, allowing them to easily accept card payments from customers. There are a number of other similar players in Europe, including Rocket Internet’s Payleven, based out of Germany, and London-headquartered SumUp.
Today’s news also heralds a brand-new service from the Stockholm-based startup — iZettle Advance will offer merchants a cash advance on future card sales. It’s effectively a lending program, with companies borrowing against projected income, paying the money back in instalments each day in proportion to card sales.
This follows a trend we’ve seen elsewhere in the online payments realm — Square has offered Square Capital to U.S. businesses for some time, and is a near-identical offering to iZettle Advance. PayPal has been doling out loans to small businesses for a while, too.
iZettle says that there are no payback deadlines, and the automated repayments vary in accordance with the merchant’s sales. The company says the advance comes with a fixed fee attached to it, rather than a percentage interest rate, and although the percentage will vary from customer-to-customer, we’re told a typical ballpark fee for repayments is around 10 percent of the borrowed sum.
“We have aimed to build a financing service that’s completely tailored to the needs of small businesses,” explains Carl-Richard Häggman, iZettle’s chief risk officer. “The service allows for small businesses to make the necessary investments in their operations, on their own terms and with minimal administration.”
Part of the company’s new $67 million cash influx will be used to help support the rollout of iZettle Advance, as well as fueling the company’s overall business.