PayPal Raises Stake in eCommerce Firm Shopware to 41%

PayPal is reportedly taking over a stake in eCommerce company Shopware from the Carlyle Group.

The company’s stake in the German company will jump from 11% to 41% in this deal, Bloomberg News reported Tuesday (Oct. 21), citing sources familiar with the matter.

Carlyle and PayPal invested $100 million in Shopware in 2022, pointing to the company’s presence in the crucial eCommerce market of Germany and its international expansion goals.

As noted here at the time, Shopware’s services include an omnichannel digital commerce platform, with features to support business-to-consumer (B2C), direct-to-consumer (D2C), business-to-business (B2B) and services-driven business models.

“We have signed an agreement to increase our investment in Shopware, a longtime and important partner in Europe,” a PayPal spokesperson told Bloomberg in an emailed statement. “This reflects our history of building strategic alliances across the ecosystem and commitment to supporting the growth of digital commerce in Europe.”

PayPal also recently announced it was investing $100 million to support digital commerce in the Middle East and Africa.

The investment is to be deployed through minority investments, acquisitions, PayPal Ventures funding and people/technology projects, the company said last month. The aim is to help local merchants scale, open new opportunities for innovators, and “bring millions more consumers and communities into the digital economy,” PayPal said in a news release.

PYMNTS examined the European eCommerce space earlier this year in an interview with David Exposito, vice president commercial, Southern Europe at Nuvei. As that report noted, the European Union can present both a “tantalizing opportunity and a logistical labyrinth” for eCommerce companies.

That’s because the EU marketplace does its best to defy definition, with 24 official languages, 27 states, and a variety of economic profiles and unique consumer behaviors.

“Europe is the eternal dilemma,” Exposito told PYMNTS. “There is no one-size-fits-all strategy for market expansion.”

Between hyperlocal payment preferences, a regulatory patchwork and a demand for frictionless digital experiences, brands face a challenge more complex than simply putting products online.

“Unless you can do really well in every market, and I don’t know any company who can, I always recommend going step by step,” Exposito said.

That’s because the challenge of expanding in Europe also presents an opportunity, the report added. Amid the region’s complexity sits a powerful tool: localized payments.