Last week, PayPal (NASDAQ:PYPL) agreed to buy Square's (NYSE:SQ) chief European rival, iZettle, for $2.2 billion. By Monday, Square was ready to announce a new debt offering to raise $750 million in cash.

The senior convertible notes will bear interest at just 0.50% per year and mature in five years.

Square could use the cash infusion to take on PayPal and iZettle with additional acquisitions or increased marketing spend.

A person paying using a Square contactless reader.

Image source: Square

An acquisition spree

PayPal isn't the only company buying smaller businesses. Square has made two important acquisitions this quarter alone.

First, it acquired parts of corporate catering start-up Zesty. The terms of the deal were undisclosed, but the move should provide a nice complement to Caviar, a food delivery and pickup service Square acquired in 2014. Zesty should expand the appeal of Square's restaurant business, and it could also integrate with the newly launched Square for Restaurants point-of-sale system unveiled earlier this month.

Just after the Zesty acquisition, Square bought Weebly for $365 million in cash and stock. Weebly is an online platform that helps people create new websites.

"Combining with Weebly, we will provide sellers with one cohesive solution to start or grow an omnichannel business," CEO Jack Dorsey said on Square's first-quarter earnings call. "Additionally, nearly 40% of Weebly's paid subscribers are outside the United States, which help us accelerate our global expansion."

Square may look for more e-commerce acquisitions in order to take on PayPal directly and offer more services to its brick-and-mortar merchants. PayPal's $2.2 billion deal for iZettle indicates there's demand for more omnichannel solutions (supporting both online and in-store sales).

While Square ended the first quarter with $100 million more in cash than the year before, it's quickly depleting that on acquisitions. Adding another $750 million in cash gives it some room to make more small acquisitions like Zesty and Weebly.

Marketing in Europe

Square may also use some of its debt offering to increase its marketing spend in Europe. The company expanded to the U.K last spring, and it intends to expand to the rest of Europe at some point. PayPal's acquisition of iZettle provides the competitor with a lot more cash to grow its brand along with the capabilities to offer a varied suite of services.

Square is only just starting to expand its services in the U.K., and its brand recognition still isn't at the level it is in the U.S. Square launched the Cash App and Instant Deposit in the U.K. last quarter, hoping to capitalize on the success it's seen from those products in the U.S.

One of Square's top areas of investment for 2018 is strengthening its position in international markets. That means a bigger investment in marketing, working with payments networks to ensure it can accept any type of payment a customer or merchant wants, and further expanding its product ecosystem abroad.

PayPal's move to acquire iZettle may have prompted Square to raise more cash in order to compete, but it might have been planning to raise cash anyway. Regardless, investors should pay attention to any acquisitions, partnerships, or other financial moves Square takes from here to see if it strengthens its position in Europe or helps provide an omnichannel solution (or both).

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.