Stripe and Advent Are Back at the Table for PayPal, This Time With a Higher Price
Stripe and the private equity firm Advent International are in active talks to acquire PayPal at a price above the $60.50 per share offer PayPal rejected in July, according to the Wall Street Journal (Engadget). A deal could be announced in the coming weeks if the parties agree on a price.
The initial offer, made in July and independently confirmed by CNBC (CNBC), valued PayPal at approximately $53 billion and represented a 28% premium to PayPal's closing price the Tuesday before the proposal. PayPal's board considered the bid too low, with sources telling Reuters that directors felt the $53 billion figure undervalued the company (Reuters).
The gap between the offer and what PayPal's board wants comes amid a steep decline in the company's valuation. PayPal was trading at historic lows before the proposal, with a market value of roughly $40 billion at the time, down approximately $320 billion from its pandemic-era peak (Engadget). Wall Street analysts have indicated that Stripe and Advent can afford to pay more and expect them to raise the offer (Reuters). The acquirers have assembled $17 billion in equity for the transaction (Reuters).
Per Reuters, Stripe and Advent would each hold an equal stake and become joint owners of PayPal if the deal closes. They have no plans to break up the company, a decision that would make Stripe one of the largest online payment processors globally (Engadget). A combined entity would process approximately $3.7 trillion in payments annually. Beyond raw scale, a merger could reduce Stripe's dependence on Visa and Mastercard rails and give it direct ownership of Venmo, PayPal's checkout system, and PayPal's crypto features (Engadget).
The strategic logic of bringing Venmo and PayPal's checkout flow in-house is straightforward. Stripe's developer-focused API layer and its ability to sign up merchants have always sat one step away from the consumer wallet. Owning both ends of a transaction, from checkout button to settlement, is the kind of vertical integration that the card networks have defended for decades through their network rules and the fees they charge merchants on each transaction (known as interchange fees). A combined Stripe-PayPal would not eliminate that fee structure, but it would give merchants a meaningfully larger surface area for routing transactions outside the traditional card networks, particularly for direct account-to-account transfers and crypto-denominated settlement. The $3.7 trillion figure, if accurate, places the combined entity in a processing-volume tier that few competitors could match.
The Advent partnership is worth noting on its own. Stripe has historically operated as a privately held company with a famously deliberate approach to how it raises and structures capital. Bringing in a private equity partner with an equal ownership stake suggests the financing requirements of a $53 billion-plus acquisition exceed what Stripe's existing balance sheet and equity base can absorb on its own. The $17 billion equity commitment assembled so far is substantial, but the total price would also require significant debt financing, and the cost of that debt in the current interest rate environment is a factor PayPal's board can reasonably point to when arguing the bid is too low.
Separately, Stripe is also in talks to acquire OpenRouter, an AI-model marketplace, according to the Wall Street Journal (WSJ). That discussion predates the most recent PayPal developments, having been reported in late July, but it signals that Stripe is pursuing acquisition activity across two fronts simultaneously: a transformative payments consolidation and a smaller, targeted move into AI infrastructure monetization.
The broader context here is what the outcome will mean for the payments landscape. If Stripe and Advent close at a higher price, the combined entity's pricing power and its ability to offer end-to-end payment processing, from consumer wallet to merchant settlement, will compress the competitive space for standalone payment processors and checkout providers. The coming weeks will determine whether the parties bridge the valuation gap that has so far kept a deal at arm's length.
