PayPal's shakeup reaches its investment unit

• Key insights: PayPal is exploring options such as potential sale of its PayPal Ventures unit.
• What's at stake: PayPal is looking to cut costs and improve branded checkout to reverse a stock slide and earnings slump.
• Forward look: Analysts say rivals such as Block are threatening to take share from PayPal. 

Since taking over for Alex Chriss as PayPal's CEO in March, Enrique Lores has embarked on a restructuring program amid a series of earnings reports that missed analyst projections. 

That includes a reconsideration of the company's venture capital unit, which will not continue in its current form. 

"As part of our continued efforts to sharpen our focus, we are exploring strategic options for our corporate venture capital arm, PayPal Ventures. We don't have additional details to share at this time," PayPal said in a statement. PayPal plans to "wind down" PayPal Ventures, according to Fortune, citing unnamed sources. A source told American Banker PayPal Ventures is "being spun off" and is not underperforming. Fortune also reported PayPal has hired Jeffries to manage a potential sale. Jeffries did not comment. 

PayPal Ventures was founded in 2016 and has invested in digital asset fintechs such as Anchorage Digital and financial technology firms such as Plaid. It has invested more than $850 million in more than 80 companies. PayPal Ventures contributed 10 cents to PayPal's $1.53 earnings per share in the fourth quarter of 2025, up from a loss of four cents in the fourth quarter of 2024. The most recent investment on PayPal Ventures' website was in cross-border fintech Xflow. 

The potential divestiture of PayPal Ventures is just one of several moves the company is making to improve its standing with investors as its stock price has fallen from $78 per share to about $42 per share over the past year.

The company's challenge is to improve branded checkout, or merchant payments that come directly through PayPal's technology. Branded has lagged investor expectations in recent years, leading PayPal to streamline other parts of its business to cut costs. PayPal is also moving technology investment to agentic commerce, anticipating demand from merchants and consumers for shopping and payment experiences that include large language models and other emerging forms of AI. 

As part of its pivot, PayPal is in the midst of a downsizing that could reduce its workforce by about 20% over the next three years. PayPal has about 24,000 employees, so the cuts could impact about 4,700 jobs. 

The company has reorganized into three units, including checkout solutions and PayPal, consumer financial services and Venmo, and payment services and crypto. In a statement at the time of the restructuring, Lores said the move was to "recommit to our fundamentals — getting much closer to the consumer, aligning the company around three strong businesses, simplifying how we work, sharpening accountability and prioritizing operational excellence."

Analysts said PayPal will have a hard time finding success despite these moves. 

"New leadership will struggle to improve branded performance, in our opinion," William Blair said in a research note.

PayPal Ventures' potential sale also comes amid rumors Stripe has expressed interest in acquiring all or parts of PayPal.  "Splitting the company apart remains the best path to shareholder value creation, in our opinion," William Blair analysts said. 

As it tries to improve its financial performance, PayPal is locked in a fierce battle with Stripe, Block and emerging crypto-focused companies like Coinbase to reach small businesses and mid-market merchants. In a May 29 research note, Morgan Stanley said Block (Square) is gaining share in this battle, adding "recent sales distribution expansion, increased price flexibility and product improvements are working."  

Regarding PayPal, Morgan Stanley said that "while PayPal's usage and satisfaction remain healthy, expectations [for customers] to switch are high."