The $800M Gorilla: eBay to Acquire Mobile Payments Disruptor Braintree

Today we are excited to report that eBay has agreed to acquire Braintree, a payments company that processes more than $12 billion in transactions a year, for $800 million. It’s one of the year’s larger M&A transactions so far, also notable as an early exit in a sector where investors have placed some big bets—more than $800 million over the last year alone in mobile payments.

NEA made one of those bets on Braintree because we saw a company with great leadership and tremendous momentum that was right at the nexus of several emerging and disruptive trends – the significant rise in ecommerce and mobile commerce payment volumes, the mass proliferation of smartphones and tablets that are being used in commerce applications, and the market pull for an easy to use, secure, and frictionless checkout experience.

Braintree does this by offering an easy-to-integrate suite of APIs for developers that enable merchants to quickly get online and begin accepting payments – essentially becoming a one-stop shop for all the services a business needs to accept payments from anywhere in the world. This has resulted in a rapid adoption of over 5000 merchants and >$10bn of transaction volume running through the system. They are replacing the traditional payment gateway and merchant account model in payments with a fully integrated online & mobile payments platform (including recurring billing, credit card storage, and international service).

The acquisition by eBay enables Braintree to combine with PayPal, a division of eBay, to complement and enhance PayPal’s current offerings such that the joint effort will accelerate PayPal’s global market leadership in payments. In a market that is forecast to grow more than three-fold by 2017 to about $1.3 trillion worldwide, that’s a big deal.

At NEA our goal is to partner with companies that will disrupt big markets and become leaders in those markets. We believe that the combined forces of global payment leader PayPal with Braintree, the leading disruptor in the payments sector is a powerful opportunity for a joint PayPal/Braintree set of offerings to sustain market leadership in the massive, global and fast-growing payments and commerce markets.