Swedish mobile payments company iZettle has secured €5m in investment funding as part of a new deal with international banking group Banco Santander – one of the largest in the world – as it works to expand beyond Europe.
The product currently pushed by iZettle is an app plus chip-and-PIN card reader that connects via Bluetooth to a merchant’s smartphone or tablet (its first hardware product, a chip-and-sign dongle, ran into some trouble with Visa Europe).
Founded in 2010, with headquarters in Stockholm, iZettle is currently active in the UK, Spain, Germany, Sweden, Denmark, Norway and Finland and “coming soon to more countries”, it announced today. Its other investors include Index Ventures, Nordic VCs Creandum and Northzone, Greylock Partners, MasterCard and American Express.
Will partnering with a Spanish bank be enough to go global?
The new funding from Banco Santander cements a partnership first announced in February. As of today, the bank’s customers in Spain and the UK will receive a cash-back discount into their accounts if they purchase iZettle’s reader. In the UK, the device retails for £99 and Banco Santander customers will receive a cash-back discount of £50. The company also takes a 2.75 per cent cut per transaction.
Banco Santander, headquartered in Spain, had 102m customers spread across Spain and Latin America as well as the UK, Portugal, Germany, Poland and the US at the close of 2012. In the UK, it claims to have 15m active customers.
If even a small percentage of those customers opt for iZettle’s solution instead of a conventional card terminal, it’ll be a significant boost. And even if that boost takes place mostly in Europe, it’ll give the company leverage to close deals with other banks:
“We want to bring iZettle to the world, and to do that we must have strategic partnerships with the world’s leading banks,” iZettle CEO Jacob de Geer said in a press statement. “Our relationship with Banco Santander is central to our transition from local to multinational services.”
The announcement today is the latest in a constant stream of partnerships and funding rounds from companies in the rapidly-expanding mobile payment market. First-mover Square – which raised $200m in its latest funding round – is yet to make the jump to Europe, leaving it open for new companies including iZettle, SumUp and Payleven as well as established players such as PayPal.
Image via iZettle
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