PayPal to sell Xoom 🤯; Sezzle shows how BNPL should be done 💸; Worldcoin is close to a $100M raise 😳

FinTech is Eating the World, 19 May

Hey Everyone,

Happy Saturday! We’re finishing the week today but it’s really worth the wait as today’s issue is the best one yet. We’re going to look at PayPal that’s planning to sell Xoom (why, how + some bonus deep dives), Sezzle which shows how BNPL should be done (their strategy is worth a steal!), and Worldcoin which is close to a $100M raise (UBI here we come?). Let’s jump straight into the awesome stuff 🌶

PayPal to sell Xoom 🤯

The (breaking?) news 🗞 Finance giant PayPal PYPL 0.00%↑ has enlisted Goldman Sachs GS 0.00%↑ o help it explore a potential sale of its international money transfer subsidiary Xoom, as per The Information.

More on this 👉 PayPal has been working on a sale process for Zoom - which it acquired for nearly a billion dollars in 2015 - for several months, according to The Information.

The possible sale could be related to influence from activist investor Elliott Management, which purchased a stake in PayPal in 2022, says The Information.

But that’s not it.

✈️ THE TAKEAWAY

Looking ahead 👀 We must remember, that in its most recent quarterly earnings, PayPal revealed that P2P total payments volume (TPV) — PayPal, Venmo, and Xoom — rose just 2% to $91 billion and represented 26% of TPV. Cross-border TPV made up 13% of TPV, down from 14% last year. Meanwhile last year, PayPal missed revenue, adjusted operating margin, and net new active users targets for the year, leading to a big pay cut for CEO Dan Schulman, who is leaving the firm this year. Hence, while the sale might be logical from a cost-cutting perspective, it makes little sense if PayPal still has ambitions to become the global financial Super App 🤔

We now know that remittances is a tough business to run, but if a sale indeed happens, who might end up buying Xoom? I only see two possible options here - it’s either a private equity firm (PE) or a legacy giant like Western Union. The latter would make the most sense though.

Bonus: PayPal’s focus on efficiency is starting to pay off 💸 [+ lots of good stuff]

ICYMI: Zepz is to lay off 26% of the workforce, and it’s not about efficiency 🤔