Have you ever wondered how PayPal transformed from a scrappy dot-com era startup into the global fintech powerhouse used by hundreds of millions today? Are you curious who actually owns this influential company nearly 25 years after its founding? And with digital payments ballooning, just how much is PayPal really worth in 2023?
This comprehensive guide will walk you through everything you need to know about PayPal – from its fascinating origin story to its current mind-boggling valuation. You‘ll uncover who the key shareholders are, how PayPal makes money, and the other fintech brands operating under its ownership like Venmo and Honey. Let‘s get started.
PayPal: A Quick Historical Overview
Before getting into valuation and ownership details, it helps set the stage with some PayPal history. Here are a few key events in PayPal‘s journey:
1998 – Early precursor Confinity founded
2000 – Confinity merges with Elon Musk‘s X.com to form PayPal as we know it
2002 – Ebay acquires PayPal for reported $1.5 billion
2014 – Split from Ebay announced with PayPal to again become independent
2015 – PayPal begins public trading on NASDAQ as PYPL
This quick overview provides context around PayPal‘s various eras under different ownership structures before arriving to its current state. Now let‘s analyze who exactly owns PayPal stock in 2023.
Who Owns PayPal? A Look at Major Shareholders
Given PayPal‘s 2015 return to life as a public company, ownership today consists of various institutional investors and funds. According to 2022 SEC filings, below are the 5 largest shareholders:
| Shareholder | Ownership Percentage |
|---|---|
| The Vanguard Group | 8.4% |
| BlackRock Inc. | 6.7% |
| State Street Corp | 4.6% |
| T. Rowe Price Associates | 3.7% |
| Geode Capital Management | 1.8% |
With no single majority owner, shareholder decisions and votes dictate high-level strategy. Now let‘s explore how this public ownership structure coincided with massive growth.
Valuing PayPal: Historical Growth Trajectory and Future Potential
As digital payments accelerate across the globe, PayPal sits right in the middle processing billions of transactions each year. Here is a snapshot of key annual metrics over the past 5 years:
| Year | Total Payment Volume | Revenue | Accounts | Market Cap |
|---|---|---|---|---|
| 2018 | $578 billion | $15.45 billion | 267 million | $102 billion |
| 2019 | $712 billion | $17.77 billion | 305 million | $128 billion |
| 2020 | $932 billion | $21.45 billion | 377 million | $307 billion |
| 2021 | $1.25 trillion | $25.37 billion | 426 million | $234 billion |
| 2022* | $1.36 trillion* | $27.5 billion* | 429 million* | $96 billion** |
Projected fully year revenue as of Q3 2022 earnings release
Current market cap as of January 2023
This tremendous growth has led analysts to estimate PayPal‘s worth approaching $200 billion in the near future. But financials only tell part of the story. PayPal‘s entire ecosystem of products drives this expansion.
A Network of PayPal-Owned Fintech Brands and Services
While PayPal‘s core digital payments platform and mobile app are its most well-known products, you may be surprised by some of the other fintech brands operating under PayPal‘s ownership, including:
- Venmo – Mobile peer-to-peer (P2P) payments app with cult-like millennial following
- Braintree – Provides payment gateway and merchant account services to e-commerce companies
- Honey – Browser extension for price tracking, coupons, rewards programs
- Hyperwallet – Facilitates global payouts for small businesses, freelancers, and gig workers
- Xoom – Enables U.S. consumers to easily send money abroad
PayPal has shelled out billions to acquire these complementary brands over the past decade. But each operates independently and targets different segments of digital payments. Together they strengthen PayPal‘s market positioning.
Now let‘s unlock the underlying business model powering PayPal‘s prosperity…
How Does PayPal Actually Make Money?
From a business model perspective, PayPal generates most of its revenue from transaction fees it charges each time money changes hands on its platform. Here is a breakdown of its major revenue sources in 2022:
Whenever you use PayPal to pay someone digitally or checkout via PayPal in stores, the company takes a small cut. Similarly, merchants are charged processing fees on payments received through PayPal. These tiny transaction cuts add up to billions in revenue annually as adoption grows.
Beyond consumer and merchant transaction fees, PayPal also offers business financing, branded credit cards, invoicing, in-store payment equipment, and charges subscription fees or interest. But its core transactional revenue engine empowers PayPal‘s prosperity.
PayPal Poised to Stay on Top
Given its tremendous scale, vast ecosystem of offerings, and the Accenture-estimated $2 trillion value of digital payments by 2025, PayPal remains well-positioned for the future even with emerging competition.
Sure, challenges exist around disruption from decentralized cryptocurrencies and blockchain technology. However, PayPal has adapted before, as showcased by its 22+ year journey from scrappy underdog to fintech juggernaut.
So while the coming decades will surely see evolution in digital payments, I wouldn‘t bet against PayPal strengthening its grip – especially when considering its trusted brand reputation, billions of loyal users worldwide, and increasingly diversified product arsenal.
Just remember, next time you use PayPal, Venmo, Honey or another PayPal-owned service – it all feeds this fintech giant‘s prosperity and over $90 billion valuation under public market ownership.
