European fintech startup iZettle has raised €40m ahead of a potential IPO

 
Lynsey Barber
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The UK is iZettle's biggest market (Source: iZettle)

One of Europe's most highly funded fintechs used by shops, stalls and small businesses across Britain has landed fresh funding from investors ahead of a potential IPO.

Payments startup iZettle has raised €40m (£35.2m), led by long-term backer Dawn Capital and Sweden's multibillion pound state pension fund, a new investor in the six-year-old Swedish firm.

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It follows a €30m round of debt financing from the European Investment Bank in September to fund research, as well as two tranches of cash in a series D round in August 2016 and January this year, totalling €120m in debt and equity.

Founder and chief executive Jacob de Geer said it would accelerate the startup's "ambitious growth plan and product innovation".

iZettle narrowed its losses to 228m Swedish Crowns (£20.2m) in 2016, the most recent year for which accounts are available, and grew revenue by 60 per cent to 643m crowns. De Veer spoke to City A.M. earlier this year about ts future, one option of which is going public.

“iZettle gives small businesses the digital tools they need to gain the competitive edge against big corporations, which is crucial in today’s technology driven market place," said Dawn general partner Josh Bell

"The company is a true disruptor and we are delighted to be co-leading the round in one of Europe’s signature fintech businesses, as it continues its expansion drive.”

Head of fundamental equities at the Fourth Swedish National Pension Fund Per Colleen said iZettle was an "attractive investment case".

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“We invest heavily in companies contributing to sustainable economic growth and are impressed by how iZettle has levelled the playing field for small businesses. We believe in iZettle’s long-term development opportunity through their data-rich technology platform, built for scalability combined with five years of unique insights about the needs of small businesses."

iZettle operates in 12 markets across Europe and Latin America with the UK its biggest market. Rival payments startup Square, founded by Twitter's Jack Dorsey, launched in the UK earlier this year.

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