Key Takeaways:
PayPal is separating its Venmo payments app into a standalone business unit, a major reorganization under new Chief Executive Officer Enrique Lores aimed at reviving growth and potentially unlocking the value of its most sought-after asset. The news sent PayPal shares up by nearly 3 percent.
Lores, who took the helm in March, is betting that a sharper corporate structure can reignite growth at a company that has lost ground to Apple, Google and Stripe in the battle over e-commerce transactions, according to people with knowledge of the changes who were not authorized to speak publicly.
The move will create three segments: Venmo, a PayPal-branded business for consumers and merchants, and a payment services unit including Braintree and its crypto operations. Venmo, with nearly 100 million users, is seen as a key target for acquirers, having generated $1.7 billion in revenue in fiscal 2025, a 20 percent increase from the previous year.
The restructuring could make it easier to value and potentially sell Venmo, which analysts see as PayPal's most valuable standalone asset. The parent company's stock has plummeted roughly 80 percent from its pandemic-era peak, attracting takeover interest from rivals like Stripe and prompting PayPal to hire bankers for defense. The company also plans to repurchase $6 billion in shares in 2026.
The strategic shift follows a period of significant underperformance for PayPal. The company's stock trades around $50, down more than 80 percent from its peak, a valuation more typical of a declining business than a digital payments leader with over 430 million active accounts. In the fourth quarter of 2025, PayPal's revenue of $8.68 billion missed analyst estimates, and growth in its branded checkout volume slowed to just one percent, down from seven percent a year earlier. The disappointing results were followed by the departure of then-CEO Alex Chriss.
Underneath the headline challenges, Venmo has been a consistent growth engine. Its debit card transaction volume jumped 50 percent in 2025, and the company's buy now, pay later offerings processed $40 billion in volume, a 20 percent increase. New CEO Enrique Lores, who previously led HP, is tasked with translating this user engagement into sustained investor value.
As part of the overhaul, PayPal is looking to hire a digital banking executive to run the new Venmo segment. The company is also creating a new artificial intelligence transformation group to be led by former Walmart tech executive Anshu Bhardwaj. Meanwhile, two key executives are departing: Diego Scotti, who ran the consumer group including Venmo, and Michelle Gill, who oversaw a small business group that is being dissolved.
This article is for informational purposes only and does not constitute investment advice.
