Stripe and Advent abandon bid to buy PayPal

PayPal shares had jumped more than 40% in this quarter

John Collison, president and co-founder of Stripe Inc., left, and Patrick Collison, chief executive officer and co-founder of Stripe. Picture: Bloomberg

A consortium of buyout firm Advent and the Collison brothers' payment processor Stripe has decided to abandon its pursuit of fintech pioneer PayPal, a potential deal that would have ranked as one of the biggest-ever leveraged buyouts.

The group is no longer pursuing a deal for PayPal, according to people familiar with the matter, asking not to be identified. It had previously offered more than $50bn for the company, people with knowledge of the matter said.

PayPal shares fell as much as 14% in after-hours trading on Friday on the alternative platform Blue Ocean. Representatives for Advent, PayPal, and Stripe declined to comment.

Founded in the late 1990s, PayPal was an early mover in digital payments. It has since struggled with modernizing its payment technologies as rivals such as Apple and Google owner Alphabet  have seized market share.

Bloomberg News first revealed in February that Stripe was considering an acquisition of parts or all of PayPal after a stock slump wiped out a chunk of its value.

The takeover interest, coupled with second-quarter earnings that topped analyst estimates, has helped it recover. PayPal shares have jumped more than 40% this quarter, giving the company a market value of about $52.6bn.

San Jose, California-based PayPal ousted former chief executive Alex Chriss earlier this year and replaced him with Enrique Lores, who took over the role in March. Mr Lores said he’ll set specific financial goals for PayPal, change how the payments company reports earnings and assign each line of business a specific revenue target to give investors a better sense of their potential. In April, the company split its operations into three units covering checkout, consumer financial services Venmo, and payments and crypto.

The Wall Street Journal reported this month that PayPal had found Advent and Stripe’s initial bid insufficient and the two sides were negotiating a potential higher price.

Advent and Stripe could always opt to come back at a later date if the situation changes.

Stripe has separately been pushing deeper into the infrastructure powering the artificial intelligence boom. Earlier this month, it agreed to buy OpenRouter,, a fast-growing gateway that provides access to hundreds of AI models.

The acquisition gives Stripe a bigger foothold in artificial intelligence as businesses seek cheaper and more flexible ways to use models from competing providers. Founded in 2023, OpenRouter lets developers access hundreds of AI models through a single platform. New York-based OpenRouter was valued at a reported $1.3 billion in a financing round earlier this year.

Founded by Patrick and John Collison, Stripe has become one of the industry’s most coveted players. The company reached $159bn valuation in an employee tender offer in February, up from $106.7bn the previous year.

Stripe has said it remained profitable last year while continuing to invest heavily in product development and acquisitions. The company recently bought stablecoin orchestration platform Bridge and crypto wallet provider Privy as it expands deeper into crypto-related payments.

Bloomberg