PayPal made headlines recently over its decision to buy Uber’s stock in a private placement in April, before the ride-hailing giant’s Initial Public Offering (IPO). Now, the online payment specialist has developed an appetite for more – and is actively looking for new strategic investments to pump cash into. But PayPal is more than just a financier… the company sees itself as a long-term investor that is keen to build new products with Uber, working closely with that company and any others it invests in.
PayPal’s share price has appreciated by 37% so far this year
Source: Yahoo Finance
PayPal CEO Dan Schulman said “we’re not investment bankers, we’re investors in relationships. We’d do something like that all day long,” adding that the company is currently providing more than $1 billion in working capital loans to small businesses every quarter. To date, Schulman said that PayPal has made about $10 billion in small business loans – often in cities that have seen an outsize number of closures in local bank branches. There is every sign that these businesses are using the capital well. Schulman said: “when we loan to a small business, we’ve seen their average sales go up by 20% or more.”
It’s easy to see why PayPal is eager to build on these types of investment. The company posted strong results earlier this year that showed an increase in sales and profit despite a slight decline in payment volume and growth. According to Schulman, that’s a direct result of how diverse the company has become.
Disclosure
Dominion holds PayPal in its Global Trends Ecommerce Fund.
Author: Theo Leworthy
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