A social media skirmish between Israeli fintech company Rapyd cofounder and CEO Arik Shtilman and a former employee in the company’s Iceland office, over the Israel-Hamas war, has resulted in an angry local backlash, which is threatening the company’s business activities there.
At least two other large companies in Iceland – IKEA Iceland and the Iceland electricity company Snerpa Power – have announced a halt of payments using Rapyd’s platform, with many calls to boycott the Israeli company and companies listed on social media that have stopped doing business with Rapyd.
“Geopolitical propaganda”
Last month Shtilman put a post on LinkedIn with a picture of the Israeli flag saying “We will win. Rapyd supports Israel.” One of Rapyd’s former employees, a product manager called Tindur Hafsteinsson, resented that Shtilman had shared the post on a platform usually, he said, for marketing announcements and he asked Shtilman not to share, “geopolitical propaganda” content and to concentrate on business announcements.
Shtilman responded, “Maybe you misunderstood so I will say it in a clear way. We will kill every single Hamas terrorist in Gaza and destroy them. Clear?” Hafsteinsson asked, “And at what cost do you feel that being justifiable?” Shtilman resolutely replied, “Any cost.”
This remark stirred up a storm in Iceland and made the headlines of the local media resulting in calls for a boycott of the Israeli company. Hafsteinsson’s response to Shtilman’s post on LinkedIn has been removed but he kept it, put in on his Facebook feed and sent it to the Icelandic media. He said, “Are you really saying these unspeakable atrocities conducted by Hamas on civilians will justify Bibi’s followers to justify twice as big atrocities on other innocent people.”
A website has even been anonymously put up listing all the Icelandic companies that work with Rapyd, listed which of them is still working with it, what are the possible alternatives to Rapyd, who is considering leaving their contract with it and who has already stopped working with it. Thus, in addition to IKEA, companies such as the fast food chain Subway, the local furniture chains JYSK and ILVA, and a number of smaller businesses have stopped working with Rapyd in Iceland. Other brands, such as Apple, Subaru, Nespresso, Dominos, Vodafone and KFC remain loyal to the Israeli payment platform.
But over 20 organizations including the Red Cross, UNICEF and the Iceland National Theater have said they are working to find alternative solutions to Rapyd.
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The argument between Shtilman and the former employee is not taking place in a vacuum. Iceland has been one of the most hostile countries to Israel since October 7, along with Ireland and Spain whose political leaders have been unequivocally opposed to the war against Hamas. Icelandic Prime Minister Katrin Jakobsdottir has expressed “Shock at the ongoing death of civilians in Gaza,” and has condemned “Every kind of violation of international law,” without explicitly mentioning Israel or condemn the slaughter carried out by Hamas which led to the outbreak of war.
Even Iceland’s Association of Composers and Lyricists has delivered an ultimatum to Iceland’s National Broadcasting Authority not to participate in the next Eurovision Song Contest in Sweden if Israel is not thrown out of the competition as Russia was in 2022, even though Russia supports Hamas.
Not everybody in Iceland is against the Israeli company. Rapyd remains the official sponsor of the Handball League and provides scholarships for prodigious talents in the sport.
Revenue from Iceland in jeopardy
Iceland is not a marginal market for the Israeli fintech company’s activities. After the outbreak of the Covid pandemic and the huge growth of online purchases, Rapyd acquired two Icelandic companies with the aim of entering the European market after years of focusing on Asia and the Middle East.
The first company was Korta, acquired for several tens of millions of dollars. Rapyd, which provides businesses with a platform for managing payments that allows them to clear money through a credit card, bought Korta which directly cleared money through Visa and Mastercard in Europe. At the time, Korta cleared $2.5 billion annually and generated revenue of $40 million from its activities in Europe. Tindur Hafsteinsson was among Korta’s 70 employees who founded Rapyd’s Iceland office.
Hafsteinsson left Rapyd in July 2021, about the time that the Israeli company bought Valitor, which clears Visa, Mastercard and American Express cards in Europe, for $100 million.
Rapyd currently has 120 employees in Iceland out of its 700 employees, according to LinkedIn. After the acquisition of Valitor, Rapyd was compelled to lay off staff in Israel in jobs that were duplicated, after the Icelandic regulator delayed approval of the deal.
Rapyd is Israel’s largest privately-held fintech company and its most valuable. According to PitchBook it is currently preparing to raise $700 million at a company valuation of $8.7 billion – the valuation could be even higher. The company has already raised $800 million to date.
Rapyd has revenue of hundreds of millions of dollars and relatively high gross profitability because it has capture control of payment processing in many countries and it receives a fee for every payment it processes. The Israeli company competes with Stripe and PayPal and allows businesses working with it to receive payments from 200 potential payment channels compared with just 70 at PayPal.
Rapyd declined to comment on this report.
Published by Globes, Israel business news – en.globes.co.il – on December 26, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.