PayPal, the giant company that provides money transfer services around the world, has agreed to acquire San Francisco-based Xoom, a company that facilitates the digital transfer of money internationally. According to the announcement the all-cash deal values Xoom at $890 million, or $25 a share.
PayPal President Dan Schulman was quoted saying that expanding into international money transfer and remittances aligns with their strategic vision to democratize the movement and management of money. He added that acquiring Xoom allows PayPal to offer a broader range of services to the global customer base.
According to him the decision to acquire Xoom will help it increase customer engagement and enter an important and growing adjacent marketplace. Moreover, as Xoom is present in 37 countries – in particular, Mexico, India, the Philippines, China and Brazil, it will be great for the company as it will help in accelerating expansion in these important markets.
Nonetheless, as Xoom is a digital money transfer provider that enables consumers to send money and pay bills for family and friends around the world in a secure, fast, and cost-effective way, using a mobile phone, tablet or computer, once it is acquired by another giant in the same sector, the move is expected to attract a lot of attention.
Founded in 2001 by PayPal investor Kevin Hartz and serial entrepreneur Alan Braverman, the company went public in 2013. Xoom President and CEO John Kunze admitted that becoming part of PayPal represents an exciting new chapter for Xoom, which will help accelerate their time-to-market in unserved geographies.
Additionally, he is of the view that it will help them expand the ways they can innovate for customers and become part of a larger, global organization. According to him it will also help them deliver the best possible experience to the customers, while maximizing value for the shareholders.
Expected Strategic Benefits of the Xoom Acquisition
This will extend PayPal’s offering to its customers i.e. broaden consumer offering to its 68 million active U.S. customers by cross-selling Xoom’s services. Additionally, it will accelerate time-to-market and enable expansion into new markets to expand its portfolio of send-markets by leveraging PayPal’s wider international network.
Additionally, this will deliver a strong technology platform as Xoom’s compelling and reliable technology platform and consumer experience are coupled with its excellent customer service. Reacting on the acquisition Schulman said that he is excited to announce that PayPal is ready to make another area of payments better for people around the world.
To contact the reporter of this story: Deepak Tiwari at email@example.com