Swedish mPOS vendor iZettle has raised EUR60 million in a Series D funding round to help it launch a cash advance service for its small business customers.
The round, led by previous investors Intel Capital and Zouk Capital and joined by all existing institutional investor, takes iZettle's total funding to almost EUR150 million and will be used to help the firm expand beyond the world of card payments.
IZettle Advance - which is being rolled out across Europe - is aimed at small businesses that face a tough time going through the arduous process of getting capital from traditional lenders.
Because the service is aimed at merchants that use iZettle's payment acceptance tech, users are pre-assessed, meaning that when they apply they can get funds within a couple of days. They then pay back the money automatically as a fraction of card sales.
Carl-Richard Häggman, chief risk officer, iZettle, says: "We have aimed to build a financing service that's completely tailored to the needs of small businesses. The service allows for small businesses to make the necessary investments in their operations, on their own terms and with minimal administration."
Although a first in Europe, the concept is well established in the US, where iZettle contemporary Square has seen strong takeup for its cash advance service, providing a lucrative revenue stream to bolster a payments processing business with extremely tight margins.
Commenting on the new funding, Mariano Belinky from investor Santander InnoVentures, says: "Jacob, Magnus and the team at iZettle have built up a real momentum in the payments marketplace, it’s great to see them rolling out new products so quickly. Their move into cashflow advances is an interesting step to help small retailers in particular. The new funding round will let iZettle sustain this pace of product innovation and growth."