PayPal may soon be making a social commerce purchase, though likely on a larger scale than consumers buying many items: The financial services company is reportedly interested in buying the photo-sharing social media platform Pinterest.
The potential acquisition — first reported by Bloomberg, who cited people who asked not to be identified because the talks are private — would value Pinterest at $45 billion. The social media company’s stock has risen over 19% in the last month, bringing its market cap to just over $40 billion — though year to date, the share price is down by nearly 5%. Pinterest went public in 2019 in an initial public offering (IPO) that valued it at $10 billion.
See also: Pinterest Prices IPO at $19 a Share; Raises $1.43B
What’s happened since that IPO, and particularly in the past 18 months, has been an acceleration of social commerce and a shift in Pinterest’s focus from allowing image sharing on virtual pinboards to offering a platform that connects shoppers with brands and styles. Earlier this year, executives laid out a vision of organic shopping experiences within the social site, with “high-quality inventory, catalog uploads and discovery services” through shoppable pins created by brands and influencers.
Since then, Pinterest has collaborated with retailers such as The Bay on digital lookbooks, launched new tools for influencers and brands, and expanded a series of features to new countries, such as its Verified Merchant program and digital shopping list tool. Pinterest has approximately 464 million monthly active users, though that number has been declining from quarter to quarter as users spend less time on social media.
CEO Ben Silbermann told analysts and investors in April that the number of users engaging with shopping on Pinterest has grown by over 200% in the last year. “We feel that users on the platform … have seen Pinterest increasingly as the destination to shop,” he said.
Read more: Pinterest Moving to Turn Posted Pictures Into Purchases With Seamless Transactions
Earlier this year, the Financial Times reported that Microsoft had previously been in talks to acquire Pinterest, part of the tech company’s strategy of snapping up social platforms with engaged communities that could operate parallel to its cloud. Microsoft already owns LinkedIn, GitHub and Minecraft.
Read more: Microsoft Reportedly Mulled Acquisition Of $51B Pinterest
Neither Pinterest nor PayPal returned PYMNTS’ request for comment.
Building the Super App
For PayPal, the rumored acquisition could bolster its new financial super app, which launched last month, with the ability to tap into social commerce channels. Talking to Karen Webster earlier this year, PayPal President and CEO Dan Schulman said no consumer wants to have dozens of apps on their phones, which necessitates the creation of a “super app” that consolidates financial instruments, including rewards points and the ability to use different payment methods.
“We’re a consumer platform, and that has tremendous scale — we can add more and more services where people can live a lot of their digital lives on this app,” Schulman said. “And for merchants who clearly want to be in the digital-first economy, this can be the operating system that enables them to move into a full, true, digital omnichannel experience.”
Related news: PayPal’s New Super App Positioned to Deliver Next-Level Connected Experience
The new PayPal app provides users with in-app shopping tools that include a loyalty program and exclusive discounts; a single platform for all bill payments and peer-to-peer money transfers; a digital wallet for payment methods and deposits; and a personalized dashboard showing a customer’s account details, among other features.
PYMNTS’ Connected Economy research found that 40% of consumers overall would be interested in integrating payments, shopping and connections with family and friends into a “super portal” that would allow users to establish a single digital identity that could be stored and shared across platforms and services.
You may also like: Study: How 73M Highly Connected Consumers Are Pioneering the Connected Economy
And according to consumers, as of 2020, PayPal is among the most trusted connected commerce enablers, second only to Amazon. Nearly 40% of consumers say they trust the company to provide new connected commerce opportunities, compared to 43% of respondents who trust Amazon; among the least trusted are Facebook, Instagram or a favored retailer.
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