Europe’s Square competitor iZettle. has raised $11.2 million in Series A funding (€8.2 million) led by Index Ventures with co-investor Creandum and further investment from Charles Dunstone, CEO and Co-founder of The Carphone Warehouse. We heard of the reported investment in August, but the deal has been confirmed today.
iZettle, which is based in Sweden, launched earlier this year as a card reader that allows users to take credit card payments from chip-enabled credit or debit cards. The free device plugs into the iPhone’s port, and you download companion app from App Store and sign up for an iZettle account.
To process a transaction you simply plug in the chip-card reader, enter the amount and a short description of the item you are selling, take a picture and insert the buyer’s credit card. The reader scans the chip in the car, you tap “Pay”, let your customer sign on the device screen to confirm the purchase and the app will send a receipt to his or her email address. iZettle will deposit funds in a merchant account by the next business day.
iZettle says that it is more secure than other mobile payments options and is EMV (Europay, MasterCard and VISA) approved, and compliant with the Payment Card Industry Data Security Standard (PCI-DSS). No sensitive data is ever stored on the mobile device or iZettle reader, and all data traffic is encrypted.
The experience is very similar to that of mobile payment disruptor Square, but instead of a swiper, iZettle works with chip-enabled cards, which are popular in Europe. The iZettle chip-card reader and app are free but the company charges per transaction. The price per transaction varies between countries and iZettle’s first market, Sweden, it is approximately €0.16 per transaction plus 2.75% per transaction. Square, which only works in the U.S. for now, actually waived its transaction fee recently and charges 2.75% per transaction.
The new funds will be used to expand into chip-card markets outside of Sweden as well as support the continued development of the iZettle. Co-founder Jacob de Geer tells me that he plans to expand iZettle to other European countries including the UK, Spain, Italy, France and Germany.