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Payment startups hoping to conquer Europe will be watching their backs a little more closely today, with the news that the Samwer brothers have just pulled together “double digit funding” for their Square clone.
PayLeven (previously known as Zenpay) is a straight-up copy of Square: a matchbox-sized dongle that fits into the top of an iPhone or iPad and can let people make payments by reading the magnetic stripe on cards.
As Deutsche Startups reports, New Enterprise Associates, Ru.net and Holtzbrinck Ventures have all put an as-yet-undisclosed amount of money into the round:
Official confirmation for this multi-million injection is still pending, and the exact size of the deal is still unclear: it is only ever mentioned as “an amount in the double digit millions.” Rocket Internet is known for flagship projects that compete with several other services, and most of all like to give them an abundant amount of capital. For example, the Airbnb and 9flats competitor Wimdu started with a direct investment of $20 million, and later gained another $90 million. By comparison, Square has collected a $ 137.5 million in funding.
This won’t just be a warning shot to Square — which has largely ignored the international market, but sources tell me is considering rollout in new countries very carefully — but also to iZettle, the Swedish competitor that is planning a European rollout very soon.
Although iZettle also gets labelled as a straight Square clone, it does at least have its own technology. Unlike its rivals, which rely on the magstripe, it reads the embedded chip on payments cards: a system that is the standard for card security across Europe, and much of the world. That may give it a headstart in some regions, especially in security conscious Germany (although it has not launched there yet).
But if the Samwer brothers want to compete, they are going to need serious money. Square’s enormous cash pile has pushed it to some $5 billion in processed payments, and iZettle has just received $31 million of its own to push hard into new countries.