The payments company Stripe and the private equity firm Advent International have offered to acquire PayPal for about $53 billion, a deal that could reshape the financial technology industry, three people familiar with the bid said on Wednesday.
PayPal, the person-to-person money transfer system, has faced pressure from newer financial technology giants like Apple Pay. The deal would allow Stripe, which focuses on online payment processing for merchants, to expand into the digital wallets of everyday consumers. Of particular interest to Stripe may be Venmo, which PayPal acquired in 2013.
PayPal’s profit has been squeezed as growth in its most lucrative business — the services that consumers use under the PayPal brand — has slowed. The company’s share price has fallen 24 percent over the past year. In February, PayPal abruptly announced that it was replacing its chief executive with Enrique Lores, its board chair and a former head of HP.
The takeover bid would value PayPal’s shares at about $60.50, roughly 28 percent above the price on Tuesday before Reuters reported the offer from Stripe and Advent. Shares were up 17 percent on Wednesday.
PayPal has not yet formally responded to the offer, which includes around $50 billion in committed bank financing, the three people said. They requested anonymity to discuss confidential financial information.
Typically, a company must work with advisers to thoroughly review an offer before responding. If PayPal’s board rejects the offer, Stripe and Advent could improve their bid. Other bidders could also emerge.
“Regardless of whether or not this deal (or a different one) is accepted by PayPal, we do think today’s news portends continued consolidation” in the payments industry, analysts at Deutsche Bank wrote on Wednesday morning.
Acquiring PayPal could give Stripe a chance to increase its hold on digital transactions for a relatively good price, given PayPal’s beleaguered shares. Analysts at Deutsche Bank said they thought Stripe, which was last valued at $159 billion by private investors, might be able to make more money off Venmo than its current owner. Venmo processed an estimated $300 billion in payments last year, about one-sixth of the $1.8 trillion total that PayPal handled.
The proposed combination may invite regulatory scrutiny because of its size, even as U.S. regulators have been more amenable to approving deals under President Trump than under President Joseph R. Biden Jr.
Analysts at William Blair questioned the logic of the deal, noting that Stripe “is already the clear leader in e-commerce processing,” with superior technology and high-profile customers. They also said the current offer might be only an “opening salvo” for Stripe and Advent.
“We do not think PayPal’s new C.E.O. will likely embrace what could be viewed as a lowball offer,” the analysts wrote.
PayPal, created in 1998, was a pioneer in the consumer-facing side of online payments. It became especially popular as a payment system for auction sites and other platforms filled with small merchants. The company was bought by eBay in 2002 and remained a subsidiary until the online marketplace spun it off as a stand-alone company in 2015.
This year, PayPal announced that it was splitting into three divisions: its traditional PayPal payment processing business, Venmo, and a payment services and crypto division.
“We need to recommit to the fundamentals,” Mr. Lores told investors in May. “That includes becoming a technology company again, sharpening our focus on consumers, aligning the company around three strong businesses and simplifying how we work.”
Founded in 2010, Stripe carved out a lane in the crowded field of electronic payment processors by offering merchants — especially online sellers — a fairly simple system for handling card payments. Stripe earned a small fee on every transaction.
Its investors include Thrive Capital, Coatue, a16z, Sequoia and at least two members of the so-called PayPal Mafia — the early PayPal personnel, including Elon Musk and Peter Thiel, who went on to become dominant forces in Silicon Valley.
Stripe grew into a global purveyor of the behind-the-scenes infrastructure for handling a variety of payment tasks, such as billing, invoicing, subscription management and sales tax calculation. Last year, Stripe said, it handled $1.9 trillion in payments. It is one of the largest privately held financial services companies, with an estimated $5 billion in annual revenue.
Advent has extensive experience in the financial payments industry. It led the $6.3 billion acquisition of Nuvei, a Canadian financial technology company, in 2024 and invested $430 million in EBanx, a Brazilian payments firm, in 2021.
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