who-owns-paypal

Who Owns PayPal?

Business / By / March 8, 2022

PayPal was first founded in 1998; it was called Confinity (among its founders was Peter Thiel); later, it merged with X.com, its major competitor, founded by Elon Musk (which would become known for other companies like Tesla and SpaceX). From this merger, PayPal was born. In 2002, PayPal was bought by eBay for $1.5 billion. eBay spun off PayPal in 2015, which would be listed as an independent entity. Today PayPal owns brands like Braintree, Venmo, Xoom, and iZettle.

PayPal major shareholders

paypal-top-institutional-shareholders
paypal-top-individual-shareholders-2020
PayPal major institutional and individual shareholders, as of 2020 (Source: PayPal Financials).

The spin-off from eBay

The official spin off of PayPal from eBay, as announced on eBay’s website (Source: eBay News).

As announced at the time:

In the distribution, eBay Inc. stockholders will receive one share of PayPal common stock for each share of eBay Inc. common stock held as of the close of business on July 8, 2015, the record date for the distribution.  Subject to the satisfaction of the conditions to the distribution, the distribution of PayPal common stock is expected to occur on July 17, 2015.  PayPal will not issue fractional shares of its common stock in the distribution.  Immediately following the distribution, PayPal will be an independent, publicly traded company and will be listed on the NASDAQ Stock Market under the ticker “PYPL.”  eBay will continue to trade on the NASDAQ Stock Market under the ticker “EBAY.”  

ebay-business-model
eBay core business is a platform business model that makes money from transaction fees happening through its marketplaces (eBay and StubHub). eBay also makes money through advertising on its classifieds marketplace and other services. The company primarily makes money by charging fees on successfully closed transactions.
how-does-paypal-make-money
PayPal makes money primarily by processing customer transactions on the Payments Platform and from other value-added services. Thus, the revenue streams are divided into transaction revenues based on the volume of activity or total payments volume. And value-added services, such as interest and fees earned on loans and interest receivable. As of 2017 PayPal generated over $13 billion in net revenues and almost $1.8 billion in net income. 
how-does-venmo-make-money
Venmo is a peer-to-peer payments app enabling users to share and make payments with friends for a variety of services. The service is free, but a 3% fee applies to credit cards. Venmo got acquired in 2012 by Braintree, and Braintree got acquired in 2013 by PayPal.
how-does-venmo-make-money
Venmo got acquired in 2012 by Braintree. Braintree was acquired in 2013 by PayPal. Thus, Venmo is part of the PayPal ecosystem. Venmo is a peer-to-peer payments app that allows users to share and make payments with friends for a variety of services. When you send money using your Venmo balance the fees are wained. Thus the service is free. However, the 3% fee applies to credit cards. That is how the company generates revenues.

Read Next: PayPal Mafia, PayPal History.

history-of-paypal
PayPal was born as the merger of two early Internet startups, Confinity (founded by Max Levchin and Peter Thiel) and X.com (founded by Elon Musk). Both companies stumbled on a commercial killer feature (enabling Internet payments via email) and ended up being extremely useful on a nascent auction platform: eBay. From the merger of these companies, PayPal was born. And it wrote the Internet business playbook for startups.

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