At one point, PayPal was doling out $10 million a month to acquire customers. PayPal raised a Series B of $23 million and Series C of $100 million in less than 9 months after launching to the public. The early buzz that the team created allowed PayPal to keep on raising money to fund its user acquisition strategy. Over 100,000 users signed up within the first month, forcing the team to drop the referral bonus to $5 eventually. They started off by offering people $20 for signing up or if they referred anyone else. Luke Nosek came up with a genius growth hack that would propel the startup’s growth to instant heights. By that time, thousands of people had already signed up for the service. PayPal created an extremely simple signup process, which involved registering with a credit card on the website and choosing a PIN, to remove friction.Ī few months later, in October 1999, PayPal finally launched to the public. To make Confinity more appealing to the public and its use case clearer, the team decided to launch its flagship product under the name of PayPal.Īt PayPal’s launch party, Nokia Ventures used the software to transfer the $3 million funding, signaling the possibilities its solution would offer. Instead of storing encrypted information, Confinity would allow users to make payments to anyone on handheld devices.īy July 1999, the team was able to secure its first-ever outside funding round from Nokia Ventures who’s intention was to keep pushing the adoption of mobile products. Apart from the new name, the team set out to develop a different type of product. They rebranded the company to Confinity, a combination of the words confidence and infinity. Unfortunately, FieldLink never really took off and forced Thiel and Levchin (who served as the firm’s CEO and CTO, respectively) to pivot. Soon after, in September 1998, they incorporated a company named FieldLink together with Levchin’s friend Nosek (who had given up on his previous startup) as well as Ken Howery. He chatted him up after the lecture and the pair met for breakfast where Levchin proposed his idea of a product that allowed users to store encrypted information on PDA devices, which enabled them to become digital wallets. Nosek prompted Levchin to get in contact with Thiel, which he did by attending one of his guest lectures. That business received its first initial investment from Peter Thiel, a former derivatives trader that had just returned to San Francisco to fund other startups (he raised $1 from friends and family) – and give guest lectures at Stanford in his spare time. At this point, one of Levchin’s closest friends (who he didn’t stay at), a guy named Luke Nosek, had already started a company. Levchin didn’t rent an apartment of his own but instead decided to crash on his friend’s couch. His intentions were crystal clear: go to the Valley and start a business. In the summer of 1998, Ukraine-born Max Levchin just moved to Paolo Alto after wrapping up his Computer Science studies at the University of Illinois. To understand how PayPal came to be, let’s first take a closer look at how each of these companies was established. PayPal, as we know it, was established in October 2000 as a result of the merger between Confinity and X.com. More than 325 million people are registered on its platform. PayPal is available in over 200 countries across the globe. PayPal can be accessed via the company’s website as well as its mobile and tablet applications (available on Android and iOS). Its merchant services include a direct checkout feature on the merchant’s storefront, shipping discounts (through its partnership with UPS), dispute management, fraud monitoring and prevention, business loans, and many more. PayPal is directly connected to the user’s bank or credit card account from which money is then retrieved or transferred.įurthermore, the company enables Two-Factor-Authentication (via the mobile phone number), which adds a necessary layer of security.Īpart from these essential features, PayPal offers a breadth of other products, such as paying with monthly installments (via PayPal Credit) or receiving cashback at selected partner stores.Ĭonversely, PayPal works together with businesses of all sizes and enables them to receive payments online. Pay other businesses (both within the platform as well as on the merchant side) in exchange for goods and services.PayPal is a FinTech company that facilitates the exchange of money across the web.
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