PayPal Kicks off First Post-Spinoff Buy with Modest (Aug. 24, 2015)
PayPal Holdings Inc. last week made its first acquisition since its spinoff from eBay, buying Chicago-based Modest, in what’s likely to be the first in a major wave of deals. No longer under the constraints of ownership by another corporation and jingling $6 billion in cash, PayPal already is following through CEO Dan Schulman’s plan to acquire companies that fit its broader strategy.
PayPal said its Braintree unit immediately will absorb Modest, a startup whose technology gives small companies a fast path to selling their products online through mobile apps and with “buy buttons” embedded in emails. The company adds to PayPal’s growing set of tools for e-commerce merchants of all sizes, and Braintree’s highly flexible platform should give Modest a major boost in gaining scale.
Chicago entrepreneurs Harper Reed and Dylan Richard launched Modest in 2012, targeting companies that want to enter e-commerce with minimal initial investment. Modest’s e-commerce app is free to participating merchants, but add-on services, such as push notifications and in-app purchase features, cost as much as $200 a month. The 18-member Modest staff will operate within Braintree’s Chicago headquarters. Terms of the deal were not disclosed.