PayPal is to take a $500 million stake in Uber as part of the ride-hailing firm's forthcoming IPO.
In a short statement on LinkedIn, PayPal CEO and president Dan Schulman said the investment would be used to extend the company's existing partnership with Uber in the US and Australia to other global markets and "explore future commercial payment collaborations, including the development of Uber’s digital wallet".
After being removed as eBay's principal partner last year, PayPal has been investing heavily in other high -growth marketplaces and platforms - including Latin America's MercadoLibre - as it bids to embed itself as the top-of-wallet provider for commerce transactions.
Says Schulman: "This is another significant milestone on our journey to be a platform partner of choice, helping to enable global commerce by connecting the world’s leading marketplaces and payment networks."
Details of the closer relationship between Uber and PayPal are scarce but it is reasonable to assume that the collaborative effort will see Uber seek to extend its payments capabilities beyond ride hailing to other complementary marketplace, much like South East Asian counterpart Grab with its GrabPay financial unit. PayPal is understood to be in discussion with Grab about a similar sizeable investment that would mirror its interest in Uber.