Who Owns PayPal, and How Much Is It Worth?

Who Owns PayPal, and How Much Is It Worth?

Key Points

  • PayPal is publicly traded and owned by a wide array of investors, with the Vanguard Group and BlackRock being the most prominent.
  • PayPal has an estimated worth of around $90 billion and could potentially double its market capitalization to $200 billion in the next one to two years.
  • PayPal was originally known as Confinity and was founded by Max Levchin and Peter Thiel, with Elon Musk joining after an official merger.
  • eBay acquired PayPal in 2002 for $1.5 billion, leading to thirteen successful years as a subsidiary before PayPal was spun off on its own in 2015.
  • PayPal owns several other products including Braintree, Xoom, Venmo, Hyperwallet, and Honey, which operate independently of PayPal.
  • PayPal makes money through transaction fees taken from customer payments and e-commerce transactions, as well as nominal percentages from paid invoices for conducting business.
  • PayPal’s longevity and strong branding have solidified its position as a leader in safe and secure online transactions.

Who owns PayPal? PayPal is one of the leading figures in the financial tech industry and has been for well over two decades now. The company has a very interesting history. It is the sort of history that mimics the rise and fall of the dot-com bubble, as well as the ascension of the modern web.

If you’ve been curious about what sort of valuation PayPal has, or who actually calls the shots, then this article will address some of those questions. PayPal has endured where many other fintech figures have failed. The company is doing better today than ever, as you’ll see over the course of this piece.

Who Owns PayPal?

who owns paypal
PayPal is currently owned and maintained by a variety of investors and shareholders.

No single entity currently owns PayPal. Instead, the company itself is publicly traded with a wide array of investors providing funds and controlling the board. The most prominent investor currently is the Vanguard Group. Vanguard owns 8.4% of PayPal’s total shares.

Another notable investor is BlackRock, which owns around 6.7% of all total shares. BlackRock is an asset management firm with trillions of dollars of assets in its control. It’s joined by State Street Global Advisors, Comprehensive Financial Management, and Geode Capital Management.

The largest public investor in PayPal is the general populace, with around 18% of shares controlled by smaller traders and investors. PayPal is publicly traded, meaning all it takes to obtain a share is the means to actually invest in the company itself.

How Much Is PayPal Worth?

As of early 2023, PayPal has an estimated worth of around $90 billion. Annual revenue for the previous year accounted for $27.5 billion. The market capitalization of PayPal is much higher. Some financial experts estimate it could be as high as $105.97 billion, with room for growth over the coming years.

PayPal has always been a winner on paper. This is noticeable given the methods it actually generates income and the other products it owns. The payment service has been synonymous with online commerce for a number of years. As such, it only makes sense that it has grown while the internet itself has expanded.

The fintech giant is only going to continue to grow over the coming years. Some experts estimate its marketing capitalization could easily double to around $200 billion in the next one to two years. Whatever PayPal is doing, it works magnificently for its overall net worth.

Changes in Ownership at PayPal

PayPal has not always been a shareholder-owned organization. It has a long history on the web, dating back to the late 90s during the initial dot-com craze. PayPal itself has outlasted some of its competitors, endured numerous changes in leadership, and even the crypto crash.

Original Founders

who owns paypal
Elon Musk, along with a few others, founded the online bank X.com, which merged with competitor Confinity in 2000. The merged company became PayPal in 2001.

PayPal was the result of the merger between X.com and Confinity. The early days of PayPal were faced with numerous competitors. At the time, each was vying for a slice of the proverbial pie when it came to market share.

Musk’s tenure at PayPal would be short-lived, and the fintech firm was bleeding cash. A new CEO needed to be found, despite an initially strong IPO opening with a valuation set at $1.2 billion.

eBay Subsidiary

Since the beginning, PayPal has been intertwined with the auction site eBay. This went further in 2002 when eBay itself acquired PayPal for $1.5 billion. Instead of having to rely on third-party transaction handling, eBay had a native solution to its offerings now that it owned PayPal.

The eBay era is very much responsible for the current financial dominance exerted by PayPal. Ownership went from 2002 to 2015, marking thirteen very successful years as a subsidiary while both companies were able to experience explosive growth.

At the time of its acquisition, eBay had millions of active customers, with fees taken from both the auction site and PayPal alike. As you can imagine, this was good for business. However, eBay’s ownership of PayPal came to an end in 2015, when the fintech company was spun off on its own.

Current Era

As mentioned under the ownership section, shareholders own PayPal currently. The fintech company continues to enjoy continual growth, with a market cap far exceeding its former parent eBay.

PayPal has also been able to diversify, with a number of its own products contributing to additional revenue streams. What once was a means of simplifying auction site transactions is now one of the largest financial institutions on the globe.

What Products Does PayPal Own?

who owns paypal
Venmo is just one of the many companies operating under the ownership of PayPal.

PayPal’s business isn’t solely restricted to online transactions, as it owns numerous other products. Braintree is among the larger companies currently owned by PayPal, and it deals very much in the same sort of circles as its parent company.

Xoom, Venmo, Hyperwallet, and Honey also rank among some of the larger products under PayPal’s umbrella. Interestingly, these companies and products operate independently of PayPal, meaning you can conduct business with just one of these entities if you so choose.

Thanks to masterful acquisitions, PayPal has leveraged the means to provide end-to-end coverage for any possible transaction thanks to its subsidiaries. You can use the products independently or as a fintech platform whether you’re a customer or business user.

How Does PayPal Make Money?

The one burning question you might have after all this information, is how does PayPal actually make money? That’s honestly a very simple answer. PayPal allows financial transactions, whether it’s between customers conducting payments or actual e-commerce.

Every transaction using PayPal as a platform has a nominal fee taken out of it, usually less than 10%. Now, this might not seem like much, but given the hundreds of millions of users on PayPal, this adds up fairly quickly.

You’ll also see transaction fees when using PayPal for conducting business. The fintech giant usually takes a nominal percentage out of paid invoices, which is just the price of doing business for some freelancers and smaller organizations.

Closing Thoughts

PayPal has been instrumental in developing a platform for safe and secure online transactions. Its continued longevity is a testament to the strength of its branding.

One thing is for sure: as long as online transactions are needed, PayPal will likely continue to have a firm foothold on the market. The fintech firm is still synonymous with online auctions, while also being a handy middleman service for online retail sales the world over.

Frequently Asked Questions

Is PayPal a reliable service?

Yes, PayPal is fairly reliable. The company is trusted by millions of users daily to handle transactions and serves as the payment processing backbone for many online retailers.

Was Elon Musk one of the founders of PayPal?

Elon Musk was one of the founders of X.com, a company that merged with Confinity to become PayPal. Musk’s tenure at PayPal was short, though, with the controversial figure being forcibly ousted from his position.

Does eBay still own PayPal?

No, eBay gave up control in 2015. PayPal now operates as its own separate entity while still continuing to do business with eBay and numerous other retailers.

Does PayPal own Venmo?

Yes, Venmo is one of the many products and companies that is owned and operated by PayPal. Venmo itself operates independently of PayPal, as you’ll see with the other companies the organization owns.

Is PayPal publicly traded?

Yes, you can purchase stock for PayPal right now on your stock exchange of choice. It is of course listed on the likes of NASDAQ under PYPL. At the time of this writing, the price of a single stock is valued at around $64, but that is always subject to change.

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