Story by Aparna Narayanan; editing by Tiffany Ap, CNN
PayPal is reportedly in talks to buy a stake in Pinterest, marking a shift in strategy for the payments firm.
PayPal is said to be in discussions to acquire a 10% stake in Pinterest for roughly $10 billion, and pay an additional $5 billion for additional shares in the visual discovery app.
Pinterest declined to comment.
If the deal goes through, it would represent PayPal’s first big investment in an outside company. But it would also mark a change of direction for PayPal, which typically invests in startups or technology firms that help its users buy goods and services online.
Instead, PayPal’s backing of Pinterest would suggest an intent to bolster a company that is disrupting one of the company’s primary revenue drivers.
Pinterest is one of the leaders in visual discovery, a fast-growing sector of online shopping. Pinterest monetizes its e-commerce platform by showing users links to online stores and shopping carts, and by offering advertising.
An acquisition would bring PayPal deeper into the Pinterest universe, which includes an e-commerce site, several visual search tools and an app that allows users to discover and save images to boards.
PayPal would also take a stake in Pinterest’s faster-growing platform, which focuses on connecting users with the objects they want to buy through third-party brands.
Sources told Re/code the deal is not final and could fall apart. The Wall Street Journal, however, also cited people familiar with the matter saying PayPal was in talks with Pinterest and could announce an investment in the company as soon as Wednesday.
PayPal and Pinterest declined to comment.
Pinterest is one of the hottest tech startups on the market, with a valuation of more than $11 billion.
PayPal currently holds a minority stake in Pinterest competitor Twilio. Citing multiple sources, CNET reported last month the San Francisco-based company was considering making another investment.
Pinterest, on the other hand, was acquired by San Francisco-based venture capital firm Pinterest Fund, which is backed by VCs Bessemer Venture Partners and Sequoia Capital.
Some well-known investors, such as serial entrepreneur Jack Dorsey of Twitter and Square, also have investments in Pinterest.
The Wall Street Journal reported late last year that PayPal had rebuffed a $6 billion bid from Square for a stake in Pinterest.
The story said PayPal declined to discuss what it is paying to acquire Pinterest.
PayPal would gain “vast new users” once the deal is finalized, one source told the Journal. “There are more than 200 million women who are likely to use this service,” another source said.
PayPal itself boasts a massive user base, including nearly 202 million active users and more than 119 million online payments users. But the majority of its users have yet to use its e-commerce platform.