iZettle, the startup based out of Sweden that competes against the likes of Square and Paypal to provide card transaction services from smartphones and tablets, is adding a little more money to its coffers today, specifically to ramp up in emerging technologies like artificial intelligence. The company has announced that it has received €30 million ($36 million) funding from the European Investment Bank, the lending arm of the European Union.
“We’re proud to receive this stamp of approval from the EIB. It’s the type of offer you can’t refuse and it will allow us to further accelerate our growth and continue to level the playing field for small businesses, giving them access to tools to take on the big corporations” said Jacob de Geer, CEO and co-founder of iZettle, in a statement. The funding follows the startup's most recent round prior to this was earlier this year, when it raised $63 million at the same $500 million valuation it had in its last equity round.
It appears the valuation is staying the same with this latest round: the money, as with earlier this year, is coming in the form of debt funding and will be distributed over the next three years, the company said.
It's coming specifically from a strategy at the EIB to providing significant funding to startups to help boost the region's tech economy, through something called the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe. Others that have received backing through the EIB and the Investment Plan include MariaDB, which picked up $27 million from the EIB earlier this year.
AI is the most persistent theme in tech today. The axiom seems to go something like this. If a startup (or larger tech company) doesn't have an AI strategy in place, a way of thinking about how innovations in machine learning, computer vision, natural language processing, neural networks and the rest cannot help your business be smarter, or even move into completely new areas; then you are most likely dead in the water.
It's akin to how people thought about mobile last decade (If you don't have a mobile strategy, you are dead in the water), or the Internet two decades before that (If you don't have a web site or Internet strategy, you're dead in the water.)
In financial services specifically, AI is making its roaring presence very much known, being used to asses risk in transactions, help with authentications, and aggregate and create analyses on wider usage. In other words, there will be many areas where iZettle may end up concentrating its efforts.
iZettle is not specifying exactly how it will be using the funds, or what products it would like to see coming out of it, but for now the company has singled out four general areas where it will be using it: developing next generation payments infrastructure; insights and actions through machine learning and artificial intelligence; digitalisation of commerce processes and scaling legislative and compliance systems.
“This loan is something that the EIB is proud of: It stands testimony to EIB’s ongoing effort to improve the access to funding for European mid-cap companies," said EIB-Vice President Alexander Stubb in a statement. "iZettle is a young and innovative company which helps digitalise our economy and improves the business and cost structure of millions of small shops.”
When iZettle last raised, its CEO said that it would in part be used to expand beyond mobile payments (and to possibly make acquisitions to meet that challenge), so that is another area where the EIB funding might also be used, to help develop those systems and for hiring talent to do that.
iZettle today is live across 10 countries in Europe, as well as Brazil and Mexico, and it does not disclose its revenue or user numbers, but remains one of the biggest providers of its services in its footprint.