PayPal gives Uber a much-needed $500m boost and unveils digital wallet plans

Following the ride-hailing giant's disappointing IPO, the two companies have revealed that there are payment collaborations on the horizon

29Apr

PayPal made a $500m investment in Uber after the ride-hailing giant went to IPO on April 26, paying $47 per share as the companies revealed plans to work together on future payment collaborations.

Uber went public with share pricings between $44–$50, announcing its plans to sell 180 million common shares to raise between $7.9bn–$9bn ahead of its public debut on the NYSE. This valued the company at $84bn, well below the $120bn it was tipped to be worth in October last year.

Given Uber's underwhelming valuation – coupled with the revelation that it lost $1bn in 1Q19 and its IPO paperwork acknowledging that it may never "achieve profitability" – the partnership with PayPal will offer significant financial coverage as it goes into its public listing. For PayPal, Uber is a strong up-and-coming partner as it prepares to dominate the next era of financial services.

"I am thrilled to announce that we have reached an agreement to extend our global partnership with Uber and intend to explore future commercial payment collaborations, including the development of Uber's digital wallet," remarked Dan Schulman, president and CEO at PayPal, on his LinkedIn page.

"Additionally, we have agreed to invest $500m in a private placement," he added. "This is another significant milestone on our journey to be a platform partner of choice, helping to enable global commerce by connecting the world's leading marketplaces and payment networks."

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