EBay acquires online payment firm Braintree
E-commerce website that already owns PayPal to pay $800M for startup used by Airbnb, Open Table
Eleven years after it acquired the online payment platform PayPal, the e-commerce site eBay is acquiring Braintree, an upstart internet and mobile payment processing service used by websites like Airbnb and Open Table.
EBay will pay about $800 million US for the small Chicago-based company that helps merchants process credit card and other payments online or on mobile phones.
Braintree will operate as a separate service within PayPal, eBay said in a news release Thursday.
Braintree CEO Bill Ready will stay on as CEO and will report to PayPal president David Marcus.
"Braintree is a perfect fit with PayPal," said eBay president and CEO John Donahoe. "Bill Ready and his team add complementary talent and technology that we believe will help accelerate PayPal's global leadership in mobile payments.
"Together, we expect that PayPal and Braintree also will accelerate our leadership in supporting developers who are creating innovative solutions for next generation commerce startups."
Braintree's roughly 180 employees and managers are expected to be absorbed into eBay.
Purchase includes mobile app Venmo
Ready said the backing of large businesses like eBay and PayPal will help Braintree innovate and expand into new markets.
"Our current customers and developer community can expect the same level of support and partnership they've always enjoyed, coupled with more resources," he said in the release.
The acquisition also includes Braintree's mobile commerce platform, Venmo, which it bought in 2012. The ability to process commercial transactions on mobile phones is becoming an increasingly important part of the e-commerce business.
PayPal, which made up 40 per cent of eBay's revenues in 2012, projects that mobile payments will account for $20 billion of its payment volume this year. That is equal to about 14 per cent of of its overall payment volume of $145 billion last year.
Braintree, which has offices in Chicago, Palo Alto, San Francisco and New York, estimates it will process about $12 billion in transactions in 2013 for merchants in roughly 40 countries in North America, Europe and Australia.
Its customers include a variety of e-commerce sites that sell products and services, including TaskRabbit, Uber and Living Social.
EBay said it facilitated $175 billion in commerce last year.
Acquisition to be complete by end of 2013
The eBay-Braintree deal still has to be approved by regulators and is expected to close late in the fourth quarter of 2013.
Braintree was founded in 2007 and says it has co-operative, bottom-up approach to innovation and problem solving as well as its "white-glove support" for the developers it works with.
"We’re unlike others in the industry; we think and do things differently," says the mission statement on its website, and on Thursday the company was quick to reassure its customers via Twitter that that unique approach won't change when its absorbed into the e-commerce behemoth that is eBay.
"We're not going anywhere. Our values, team, and technology won't change," the company said in one tweet soon after the sale was announced, followed by, "The way we handle risk won't change. We're committed to providing the same human-powered customer service you know."