Braintree, Chicago’s own leader in online payments, is acquiring New York City-based mobile payments company Venmo for $26 million. This news comes less than three weeks after Braintree announced it would more than triple the size of its Chicago office. Both companies are backed by Accel Partners.
Earlier this month, Braintree CEO Bill Ready told us mobile commerce was one of two macrotrends on the minds of anyone in the online payments space. Already, mobile comprises one quarter of the $4 billion in credit card transactions Braintree processes per year. With his company’s acquisition of Venmo, it seems Ready and his team are pushing to take the mobile shopping challenge head-on.
And how will they do it? By pairing their processing power with Venmo’s digital wallet. While Braintree facilitates credit card payments for everyone from Disqus to Belly, Venmo makes it easy to swap funds with friends using a smartphone, and it’s the marriage of these separate but compatible services that looks to be a winning combination.
“By combining forces, Braintree and Venmo can continue to make the mobile shopping experience better for both merchants and consumers,” Ready says. For example, existing Venmo users will soon be able to use their digital wallets to place payments with any of the thousands of online merchants who utilize Braintree to process transactions. Ready sees this acquisition as an opportunity to bolster his company’s mobile offerings, by keeping up with the growing practice of mobile shopping and giving developers and consumers “a different set of tools to thrive in a mobile world.”
Over a decade ago, Ready says, PayPal led the first wave of ecommerce by creating a set of tools that shook up the way people shopped online. Now, customers will be able to use Braintree’s payment platform for the first time. The second wave, he says, is now. “We believe that the combination of Braintree and Venmo will provide the tools and experiences that will power the next decade of ecommerce for both merchants and consumers.”
Venmo’s 23-person team will remain in its New York City headquarters, while Braintree’s office expansion plans are on track. In fact, according to Ready, “The acquisition will help us grow the business even faster, which means we're likely to add those jobs even faster than before in our Chicago headquarters.”
Visit Braintree's website, check out their BIC company profile and follow them on Twitter at @braintree. Visit Venmo's website and follow them on Twitter at @venmo.