How PayPal’s rumored interest in Pinterest connects to the social-shopping boom

Monday, October 25, 2021 by Robinhood Snacks |
From Pin to pan [mapodile/E+ via Getty Images]

From Pin to pan [mapodile/E+ via Getty Images]

DIY holiday gift inspo... Some want a hand-poured soy candle, some want a multibillion-dollar company. PayPal was reportedly in talks to buy Pinterest for a whopping $45B — a cushy premium on its $40B market cap. It would’ve been the biggest acquisition of a social-media company ever. But late on Sunday, PayPal said it was not pursuing a Pinterest acquisition “at this time.” Pinterest shares plunged on the news. At first tap, the pairing might have seemed random:

  • PayPal is the $300B online payments giant, with 400M+ users. It rose to fintech fame thanks to its handy checkout button on retailers' sites.
  • Pinterest, which IPO’d in 2019, is the wholesome social network where 450M people create mood boards for chateau-style weddings, man caves, and latte art.

Came for the vintage Pin-spo... left with the vintage jeans. The PayPal-Pinterest reports come at a time when product discovery and spending are shifting to social apps like Insta and TikTok. US shopping on social sites is expected to jump 36% this year, to $36B. Not coincidentally: Many Pins have "shop" buttons that connect to merchants' sites. Pinterest is where people start the shopping journey — a payments company like PayPal might be interested in finishing it.

  • Buying an audience: More than half of Pinterest users are women between the ages of 24 and 49, a lucrative demo that makes the bulk of families’ spending decisions. Nearly half of Americans who make $100K+/year are Pinners.
  • Social shopping: If PayPal integrated its payment system with shoppable Pins, it could boost its transaction revenue from 450M+ Pinners
  • Selling #ads: Pinterest’s revenue from retailers’ “Promoted Pins” would've helped PayPal diversify its income, which mainly depends on payments volume.

PayPal wants “super app” status… TBD if it can execute. Super apps like Alipay and Alibaba are used widely across Asia to shop, bank, chat, and post — all in one. Despite its big ambitions and $19B in cash to splurge, PayPal still hasn’t integrated with Venmo, which it bought in 2013 (you can’t Venmo someone who only has PayPal). PayPal isn’t pursuing a Pin-quisition at this time — but if it does eventually buy Pinterest or another social platform, seamless integration would likely be key to turbocharging its social-ecomm ambitions.