PayPal closes PayPal Ventures to refocus on payments

Caught between intense competition, the online payments pioneer is scaling back its technology investments. The aim is to stop spreading itself too thin and protect its core business.

A chapter is quietly closing for the US payments giant. After a decade in operation, PayPal is preparing to permanently shut its venture-capital arm, PayPal Ventures. The team, which still had more than 10 employees at the end of 2025, has been cut back to just two people. Further evidence of the ongoing wind-down is that the webpage listing the fund's staff has simply been removed from the official website.

The company is now actively seeking buyers for its holdings in the many start-ups it backed. To handle the process, it has discreetly appointed the influential investment bank Jefferies.

PayPal Ventures portfolio sale

The move is highly symbolic. Created in 2016, shortly after PayPal split from eBay, this investment arm managed three funds with a combined value of $850 million. Over 10 years, PayPal Ventures invested in more than 80 technology start-ups. Its most prominent investments included major names in the sector, such as banking-integration specialist Plaid and crypto-asset custodian Anchorage Digital.

A major clear-out amid the payments crisis

This abrupt dismantling follows a broad shake-up at the top of the fintech group. In February 2026, with its turnaround plan stalling and its share price falling sharply, the board dismissed chief executive Alex Chriss. He has been replaced by Enrique Lores, the former HP boss, who faces an urgent task of turning the business around.

The assessment is stark. PayPal's long-standing cash generator - its traditional checkout button used on e-commerce websites - is losing momentum. This high-margin segment grew by only 1% in the final quarter of 2025. Squeezed between inflation affecting lower-income households and fierce competition from Apple Pay, Stripe and neobank Revolut, PayPal is losing ground in its own core market.

To reassure Wall Street investors, Enrique Lores has reorganised the group into three divisions: payments, consumer services including Venmo, and crypto. More importantly, this simplification comes with a severe cost-cutting programme. PayPal intends to reduce its global workforce by around 20% over the next two to three years. More than 4,500 jobs will be eliminated, with a clear target: urgently saving $1.5 billion. The closure of PayPal Ventures is part of that drive.

Strategic shift towards core operations

The situation is not disastrous, however. While the legacy payment button is struggling, other group services remain in robust health. Venmo, for instance, saw revenue jump by 20% and exceed 100 million users, while instalment payments generated more than $40 billion in transactions.

By closing its venture-capital division, PayPal is stopping its resources from being spread too widely and concentrating them on where its future will be decided. The chief executive's goal is to channel the resulting savings back into modernising its core business, particularly through artificial intelligence (AI), to make the shopping experience smoother and more competitive.