Stripe and Advent bid $53bn for PayPal takeover

The billionaire Irish brothers behind Stripe have teamed up with American private equity firm Advent International in a $53 billion-plus bid for PayPal, a deal that would put two of the payment platforms most relied upon by UK small businesses under the same roof.

Stripe and Advent have offered $60.50 a share for the New York-listed company, a premium of around 28 per cent to PayPal’s closing price on Tuesday, according to Reuters, which first reported the approach. The plan is for the pair to co-own the business rather than break it up.

PayPal had not responded to the bid at the time of writing. Advent declined to comment, while Stripe and PayPal did not immediately respond to requests for comment. PayPal shares jumped 16 per cent in premarket trading on news of the approach, and the offer is reported to be backed by around $50 billion in committed financing from banks.

For the hundreds of thousands of British firms that take payments through one or both platforms, this is more than Wall Street theatre. Stripe powers the checkout for much of the online economy, while PayPal remains a fixture at the tills of small e-commerce businesses, sole traders and side hustles across the UK. A combination would concentrate an enormous share of SME payment flows, and the fees that go with them, in far fewer hands.

Many small firms still find themselves weighing PayPal against Stripe and Square when choosing how to get paid online. Whether a tie-up would mean sharper pricing or less pressure to compete on fees is the question business owners will want answered long before any deal completes.

Stripe was founded in 2010 by Patrick and John Collison after the siblings moved to the US, and swiftly established itself as the most important payment system for the internet economy by making it far easier for businesses to transact online. The company, which has dual headquarters in San Francisco and Dublin, is now valued at $159 billion, making it the world’s most valuable privately owned fintech. Patrick, 37, is chief executive, while John, 35, serves as president.

PayPal’s story stretches back further. Set up in 1998 as Confinity by Peter Thiel and two others, it merged two years later with rival X.com, co-founded by Elon Musk, now the world’s richest person. An early pioneer of digital payments, its success made fortunes for both men.

But the business has come under sustained pressure from newer entrants, ranging from Apple and Google to buy-now-pay-later players such as Sweden’s Klarna, which has slashed jobs as AI reshapes its business.

The approach also lands amid a broader wave of consolidation in payments. In December, GoCardless agreed a £920 million sale to Dutch rival Mollie, creating a combined group serving more than 350,000 businesses across Europe.

If Stripe and Advent succeed, the disruptor that made its name unseating PayPal would end up owning it. For UK business owners, the sensible move now is to watch the fee schedules, not the share price.

Amy Ingham

Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.