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The Fascinating Ownership Journey of Venmo: From Start-up to Mobile Payment Powerhouse

The Fascinating Story behind Venmos Ownership Changes

Venmo is a popular mobile payment service that allows users to send and receive money from each other with just a few taps on their mobile devices. The app has revolutionized the way people pay for things and has also changed the ownership structures over time.

In this article, well take a deep dive into the ownership journey of Venmo.

Initial Ownership by Andrew Kortina and Iqram Magdon-Ismail

Venmo was created by Andrew Kortina and Iqram Magdon-Ismail in 2009 after they realized the need for a convenient peer-to-peer payment service. The two friends developed the service in their free time while working full-time jobs.

Venmo gained popularity among the tech-savvy millennials, and its user base exploded.

Acquisition by Braintree in 2012

In 2012, Braintree, a payment gateway startup, acquired Venmo for $26.2 million. The move was strategic, as Braintree wanted to expand its mobile payment services.

Braintree CEO, Bill Ready, revealed that the acquisition was to leverage Venmos unique social payments feature and incorporate it into Braintrees existing infrastructure.

Acquisition by PayPal in 2013

The acquisition of Venmo by PayPal for $800 million in 2013 was a significant milestone in the payment industry. PayPal recognized the potential of Venmos easy-to-use platform and extensive user base.

The acquisition enables Venmo to tap into PayPals vast resources, infrastructure, and knowledge.

The Competition Between Venmo and Zelle

Venmo has become so popular that its redefined the payment industry; however, several other mobile payment services have entered the market. One notable competitor is Zelle, a payment service thats partnered with multiple banks and financial institutions.

Despite being younger, Zelle has been taking away Venmos user base. Numerous banks and financial institutions have joined in the partnership, giving the financial institutions and banks leverage over Venmo.

Venmos Response to Competition

Venmo has been responding to the competition by updating its features and services continually. The digital wallet service has expanded its reach to merchants, small businesses, and even crypto traders.

Venmo introduced a debit card to allow users to easily withdraw funds from their account at an ATM. Besides, Venmo added a purchase protection feature earlier this year to provide additional safeguards from unauthorized payments.

The Future of Venmo

Venmos ownership history is fascinating, and the service has grown to be a vital part of the payment industry. With Braintree and Paypal, Venmos future looks bright.

The acquisition of Braintree and Paypal enables Venmo to expand its reach beyond the United States. Venmo is also expected to continue partnering with merchants to allow Venmo payments as an option for shoppers.


Venmo’s journey has been remarkable. The innovative approach to peer-to-peer payments has revolutionized the payment industry.

The future of Venmo looks promising, which means the competition between them with those like Zelle will continue to be fierce. As Venmo continues to evolve and respond to consumers’ needs, it will undoubtedly continue to be a significant player in the payment industry.

Initial Investments: The Role of Lerer Hippeau and Betaworks in Venmos Success

When Andrew Kortina and Iqram Magdon-Ismail first created Venmo in 2009, they had no idea that their payment application would cause a revolution in the payment industry. The app quickly gained popularity and made peer-to-peer payments a simple process that could be completed with just a few taps on a mobile device.

However, the success of Venmo would not have been possible without the investors who believed in the potential of the app. Lerer Hippeau and Betaworks were two of the initial investors who played an essential role in Venmos early development.

Investment by Lerer Hippeau

Lerer Hippeau is a venture capital firm that specializes in supporting early-stage startups. The New York-based firm invested in Venmo in 2010, when the app was still in its early stages.

Lerer Hippeaus investment allowed Venmo to hire more engineers and expand their user base. Venmos simplicity and social sharing elements made it a popular app, particularly among young people.

Lerer Hippeau was impressed by Venmos potential to disrupt the traditional payment industry and therefore decided to invest $1.2 million. The investment allowed Venmo to improve its infrastructure and grow its user base.

According to Lerer Hippeau Managing Partner Ben Lerer, when four or five people would stand in a circle and put money in a pot to pay somebody for something, that should be Venmo.

Investment by Betaworks

Betaworks, a New York-based technology studio, is another early investor in Venmo. Betaworks invests in early-stage companies and supports them by providing product development, design, and engineering expertise.

Betaworks invested in Venmo early in its development and played a crucial role in providing the structure needed by the company to grow. Betaworks invested approximately $1.2 million in Venmo in 2010 alongside Lerer Hippeau.

The investments from both Lerer Hippeau and Betaworks were essential in allowing Venmo to become a mobile payments powerhouse. Betaworks investment facilitated the growth of Venmos development team and allowed the company to integrate electronic payments into its structure.

Braintree’s Acquisition of Venmo

In 2012, Venmo was acquired by Braintree, following a $26.2 million acquisition deal. Braintree was impressed by Venmo’s ability to accommodate users’ needs through a simple and efficient app that makes the payment process fun.

Braintree was determined to leverage Venmo’s strengths, especially its social mobile payment service, for its merchant acquisition and development process. Braintree’s acquisition strategy proved to be successful since it allowed Venmo to access more resources and expand into more regions.

Through Venmo, Braintree had a new way of reaching a younger audience and opening up new markets for its mobile payments. Once Venmos user base grew, it became one of the most popular mobile payment services in the United States, earning billions of dollars in annual payments.

With the help of the acquisition deal, Venmo also made it easier for users to transact on their mobile devices. In 2015, Braintree announced the launch of Venmo Touch, a mobile app that allowed users to make one-touch payments and made it easier for businesses to integrate Venmo into their apps.

The acquisition by Braintree played a significant role in Venmos ascension as a disruptive financial technology/ FinTech.


The partnership between Lerer Hippeau, Betaworks, and Braintree played a vital role in Venmos success. The investments made by Lerer Hippeau and Betaworks provided essential resources needed to improve Venmos infrastructure, increase its user base, and establish its dominance in the payment industry.

Through Braintree’s acquisition of Venmo, the payment service was transformed and expanded, making it more accessible to consumers in the United States. The investments allowed Venmo to grow its team and infrastructure, facilitating its growth into a mobile payment platform with significant potential for future growth.

eBays Ownership of Venmo and PayPals Indirect Acquisition

Venmo was founded in 2009 as a payment app that allowed users to send and receive money from each other in a way that was simple, fast, and secure. From its inception until 2015, Venmo was owned by eBay, which saw the potential of the app in the rapidly emerging market of peer-to-peer payments.

Today, Venmo has over 70 million active users, making it one of the most popular mobile payment apps in the world. However, the history of Venmos ownership is a fascinating one.

eBays Ownership of Venmo

eBay acquired the payment processing system, PayPal, in 2002 for $1.5 billion, with the goal of creating a complete, end-to-end payment solution that would make it easier for people to shop online. Venmo was just a year old when eBay acquired it in a deal that was worth an estimated $26 million.

Although Venmo was still in its early stages, eBay recognized the potential of peer-to-peer payments and believed that Venmo could complement PayPals existing business model. Following the acquisition of Venmo, eBay integrated Venmo into PayPal, but kept it separate from PayPal’s main site.

Venmo continued to operate independently and eventually developed a social payments ecosystem, allowing for seamless transactions between members of its community. The user-friendly platform and social media-style functionality made Venmo a favorite among millennials.

PayPals Indirect Acquisition of Venmo

In 2013, PayPal indirectly acquired Venmo through its acquisition of Braintree, a payment gateway startup that had acquired Venmo in 2012. Braintree had recognized the potential of Venmos easy-to-use platform and extensive user base, acquiring the app for approximately $26 million.

Braintree’s acquisition of Venmo was considered a significant milestone in the payment industry by experts, as it expanded Braintree’s mobile payment services. PayPal recognized the strengths of Venmo’s social-mobile platform and its use of PayPals platform, which led to PayPals acquisition of Braintree for $800 million.

As a result of the acquisition, Venmo was integrated into PayPal’s system, giving it access to PayPals resources and expertise. Venmo’s integration into PayPal’s platform has benefited its users significantly, as the platform allows for seamless transactions between buyers and sellers without fees.

PayPal ultimately replaced the ‘Pay with Venmo’ feature with ‘Pay with PayPal’ for many merchants, prioritizing the PayPal brand name over Venmo. Because of the acquisition, Venmo can now access more resources and expand into more regions, making it more efficient and accessible to consumers in the United States.

The acquisition also allowed PayPal to enhance its product offerings, improve its payment security process and benefit from Braintree’s merchant base. Venmo has since then become a vital part of PayPals online payment system and frequently pops up in payment options alongside PayPal itself.


In conclusion, Venmo’s ownership journey, from eBay to PayPal, is a fascinating example of how mobile payment services can disrupt the financial industry. eBay’s acquisition of Venmo was essential in laying the groundwork for Venmo’s success.

By owning Venmo, eBay saw the need to complement its existing business model by developing its mobile payment solutions. The indirect acquisition by PayPal through Braintree was equally significant, as it allowed Venmo to access more resources, expand into new markets, and integrate its system to PayPal’s platform.

With the ownership behind Venmo firmly in PayPal’s hands, its future as a market leader in the mobile payment sector is promising.

How PayPal and Venmo Work Together

Venmo is one of the fastest-growing mobile payment services, revolutionizing the way people make digital payments. PayPal’s subsidiary owns the app, and it operates independently but is integrated into PayPal’s ecosystem.

This allows Venmo’s users to leverage both apps’ benefits, which provides secure, seamless and flexible payment options for users worldwide.

Venmo Operating as a Subsidiary of PayPal

Venmo operates as a subsidiary of PayPal, which gives it a level of autonomy but allows the company to integrate its system into PayPal’s platform. The acquisition of Venmo enabled PayPal to diversify its product offerings and attract a younger user base.

Currently, users can operate PayPal and Venmo side-by-side in the PayPal ecosystem, enjoying the benefits of using both platforms. For merchants who are integrated with PayPal, transactions made through Venmo can now be processed via PayPal’s infrastructure without incurring an additional fee.

The subsidiary structure allows Venmo to maintain its independent service, user interface, and UX design elements, which resonate well among Millenials. Integration of Venmo into PayPal’s Ecosystem

PayPal and Venmo are linked financially through a common feature, which allows PayPal users to send money to Venmo accounts and vice versa.

Venmo’s users can withdraw their funds holdings directly to their PayPal accounts, which can then be transferred to a verified bank account. This integration has increased user choices and has made the transaction process more secure and comfortable.

Additionally, PayPal’s acquisition of Braintree has enabled Venmo to access a widespread network of merchants who accept PayPal payments already. With PayPal’s support, Venmo has improved the reach of its mobile payment services to the point of being a disruptive force in the market allowing Venmo to catch up with competitors such as Zelle.

How Venmo Operates Under PayPals Ownership

Venmo’s user-friendly interface, convenience and fast transaction speed have remained even after PayPal’s acquisition. Venmo’s standout features include the absence of transaction fees on its basic service.

The app’s users can make transactions, pay bills, and make mobile payments through a single app. With Venmo, users are also able to keep a record of all their financial transactions, which is incredibly convenient.

Under PayPal’s ownership, Venmo has continued to experience extensive growth, becoming a vital component in PayPal’s ecosystem. As of 2021, Venmo processed more than 65 billion worth of transactions, a significant rise from PayPal’s reported transaction value of $936 billion.

Venmo under PayPal’s ownership has continued to introduce features to facilitate seamless transactions for its users. Venmo has introduced the Venmo Card, which allows users to access and use their balances for in-person payments.

The app has also integrated cryptocurrencies into its platform to accommodate younger investors interested in the concept.


In conclusion, Venmo’s acquisition by PayPal has been an incredible journey for its users and has helped to solidify Venmo’s position in the mobile payment industry. By operating as a subsidiary of PayPal, Venmo can enjoy further resources and expertise while still preserving its user-friendly design, interface and infrastructure.

The success of Venmo under PayPal’s ownership is evident in its skyrocketing user base and transaction volumes. With both PayPal and Venmo at the vanguard of mobile payments, the future of the duo is looking very bright.

In conclusion, the ownership journey of Venmo, from eBay to PayPal, has played a crucial role in its success as a leading mobile payment service. Under PayPal’s ownership, Venmo has thrived as a subsidiary, benefiting from integration into PayPal’s ecosystem while maintaining its user-friendly interface and secure features.

The financial success of Venmo under PayPal’s ownership is evident in its significant transaction volumes and growing user base. The integration of Venmo into the PayPal platform has created a seamless and convenient payment experience for users.

As mobile payments continue to shape the future of the financial industry, the collaboration between PayPal and Venmo highlights the importance of adapting to evolving consumer needs and leveraging synergies between companies to drive growth and innovation.

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