The deal will enable PayPal to expand its presence in in-store payments globally, and will mark the largest-ever acquisition by the USA fintech giant, Reuters reports.
The company was planning to raise about 2 billion Swedish crowns ($228 million) from the IPO.Established in 2010, iZettle is known for offering small businesses and individuals a way to take payments using mini credit card readers that turn smartphones or tablets into cash registers.
iZettle, headquartered in Stockholm, is present in 11 countries, including Brazil, and offers other services to small businesses as loans.
By joining forces with PayPal, which operates in 200 countries, iZettle will be able to accelerate its global expansion, including to the USA, the companies said.
"Combining our assets and expertise with a global industry leader like PayPal allows us to deliver even more value to small businesses to help them succeed in a world of giants", said iZettle CEO Jacob de Geer. The company said it expects to reach profitability by the year 2020.
Once the acquisition closes, Jacob de Geer will continue to lead iZettle, which will operate as an integral part of PayPal's merchant services offering, reporting to PayPal's Chief Operating Officer Bill Ready. iZettle's experienced management team, who have a demonstrated track record of scaling at pace, will continue running the business, ensuring continuity for customers, employees and partners.