The digital payments giant PayPal Holdings is in advanced talks about a takeover of iZettle in a move that would gatecrash one of the European technology sector’s biggest stock market flotations.
Sky News has learnt that PayPal could announce its intention to buy iZettle as soon as Friday morning.
The exact purchase price is unclear, although it is expected to be at a significant premium to the $1.1bn valuation that iZettle was reported to be seeking from its listing on Nasdaq Stockholm.
People close to the talks cautioned that a deal could still fall apart.
A takeover by PayPal, which has a market capitalisation of over $92bn, would underline the fast-changing nature of the world’s digital payments sector.
iZettle, which is backed by major early-stage investors such as Index Ventures and Dawn Capital, has become a big player in mobile payments infrastructure.
It was founded in Sweden as a provider of credit card readers to small businesses, but has outlined major ambitions to take advantage of the rapid evolution in artificial intelligence and cloud technology in order to develop new products for its customer base.
The company has a presence in Brazil and Mexico, as well as across Europe – with its brand increasingly familiar in British coffee shops and restaurants.
Announcing its IPO plan last week, Jacob de Geer, the chief executive and co-founder, said: “Ever since first revolutionising mobile payments in 2011 through its first card reader, iZettle has shown rapid and sustainable growth and moved beyond payments to offer a leading commerce platform tailored to small businesses in Europe and Latin America.
“iZettle offers small businesses affordable and hassle-free tools to help them get paid, sell smarter and grow their businesses.
“The IPO will provide us with improved access to capital markets to facilitate our continued growth and help us strengthen our profile with merchants, key business partners and in the fierce competition for talent. We look forward to embarking on the next stage of our journey together with existing and new shareholders in iZettle.”
In the UK, Worldpay, the FTSE-100 payments group, was acquired last year by Vantiv of the US, while Klarna, another European payments player, has raised money from strategic investors such as Visa.
It was unclear on Thursday night whether Mr de Geer and his senior colleagues would remain with the business if a takeover by PayPal does go ahead, although sources indicated that they would be likely to.
Nasdaq-listed PayPal, which was previously part of the same company as the online auction site eBay, is a giant in the sector, disclosing in its first-quarter results last month that it processed $49bn in mobile payments during the three months to 31 March.
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“As the digital economy gathers speed, we are excited to provide new and innovative capabilities to better serve our consumer and merchant customers,” said Dan Schulman, PayPal’s president and CEO, said.
Neither PayPal nor iZettle would respond to requests for comment on Thursday evening.