Key Points
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The acquisition would give Stripe and Block, which is also reportedly part of the group, access to a massive consumer base to pair with their strong merchant offerings.
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Venmo has established itself as one of the go-to brands among consumers for payment transfers.
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Venmo also offers debit and credit cards and the ability to pay at checkout through the platform.
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A trio of companies is reportedly planning to buy one of the original digital payments companies, PayPal (NASDAQ:PYPL), in a deal valued at $53.4 billion, or $60.50 per share, according to Reuters.
PayPal stock rose over 17% on July 15.
Reuters reported that Stripe and Advent would jointly own PayPal under the proposed deal. CNBC reported that Block is also joining the group, with each planning to contribute $17 billion in equity.
The offer also reportedly includes about $50 billion in committed bank financing. As of this writing, PayPal’s board of directors had yet to respond to the offer.
Since soaring during the pandemic, PayPal stock has been absolutely crushed over the past five years, down more than 81%.
But the company could prove to be a compelling addition for Stripe or Block, with strong offerings like Venmo.
A complementary payments business
PayPal has struggled since the pandemic, as grand growth expectations have yet to be realized, and competition has emerged from everywhere.
Apple Pay and Google Pay became very popular among consumers paying at checkout; companies like Stripe competed on the merchant side, and buy-now-pay-later solutions also became more competitive.
One reason PayPal would be attractive to companies like Stripe and Block is because of its consumer network, which is over 430 million consumer accounts strong.
Stripe and Block are big on the merchant side, so pairing the two could create a network where the two, particularly Stripe, could achieve better economics on each transaction, or have a better base for future initiatives like Stablecoins.
PayPal could also help Stripe accelerate its efforts on digital wallets, according to analysts at TD Cowen.
Additionally, Venmo, PayPal’s peer-to-peer (P2P) transfer solution that also offers debit and credit cards and can be used to pay at checkout, could prove to be the real prize for Stripe in driving its ambitions on the consumer front.
PayPal has historically struggled to monetize Venmo as much as it would have liked, because P2P transfers are free. However, the platform has a great reputation and generates tremendous volume.
In the first quarter of 2026, PayPal noted that active account growth was largely driven by Venmo. Venmo has also experienced six consecutive quarters of double-digit percentage growth in total payment volume.
In a research note issued in February by Mizuho analysts Dan Dolev and Alexander Jenkins, who were speculating on a Stripe-PayPal tie-up at the time, the two called Venmo the “ultimate” P2P franchise.
Will the deal happen?
While many aspects of PayPal, including Venmo, could make it attractive to acquirers, William Blair analyst Andrew Jeffrey is skeptical of the initial offer.
“We do not think PayPal’s new CEO will likely embrace what could be viewed as a low-ball offer. If the current offer is an opening salvo, we could see Stripe and Advent go as high at $70 per share,” Jeffrey wrote in a research note, according to Reuters.
So, this could just be the beginning of negotiations.
As I mentioned above, PayPal is one of the original payment companies, so the board is likely to hold some sentimental attachment.
They will likely want to ensure there is not a better strategic alternative, and at the very least, get an offer that reflects the company’s full value and pleases shareholders.
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Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Apple, Block, and PayPal. The Motley Fool recommends the following options: short September 2026 $47.50 calls on PayPal. The Motley Fool has a disclosure policy.
