Swedish payments start-up iZettle said Wednesday it had raised 40 million euros ($47 million) in funding to boost its growth strategy.

The small business commerce platform lists Jack Dorsey's Square among its competitors and currently operates in 12 markets across Europe and Latin America.

The funding round was led by early stage venture capital investor Dawn and Swedish government agency The Fourth Swedish National Pension Fund, with backing from existing investors.

With the addition of the extra capital, iZettle has raised a total of about $314.8 million, data from research firm Crunchbase indicates.

Jacob de Geer, co-founder and chief executive of iZettle, said the start-up was preparing for a potential initial public offering (IPO) in 2018 but that "anything can happen" over the next year.

"There have been a lot of discussions and rumors related to an IPO for iZettle," de Geer said in an interview with CNBC Tuesday. "I think we remain very true to what we have said all along, which is that we are preparing the company for potentially going public sometime during 2018. But that's surrounded by so many ifs and buts, market conditions and so-forth. So I guess time will tell."

While de Geer didn't comment on the current valuation of the firm, a report by the Financial Times in 2015 valued the company at $500 million.

Founded in 2011, iZettle has morphed from a mobile payments business into a company that provides tools for firms to take payments and register and analyze sales. Last year, it introduced its own small business lending service called Advance.

Though it is a rival to New York stock exchange-listed Square, de Geer said iZettle only crosses Dorsey's firm in one market — the U.K.

"If you look at the competition within our key markets, the only market where we have Square available is actually the U.K. But we have a very solid market leadership."