Chicago-based payments gateway Braintree is currently shopping itself around to potential acquirers, TechCrunch has learned. The company has been on the block for some time, having previously tried to work out a deal with Google which fell through. More recently, it had been in acquisition talks with Square, which also fell through, possibly because Braintree is asking for too high a valuation. Talks with PayPal, however, may still be ongoing, we’ve heard.
According to industry sources, Braintree has been asking for $1 billion, which seems unrealistic. There are only a few companies that could afford (or want) the payments gateway at that price, and Google, Square and PayPal are on a very short list.
Founded in 2007, Braintree now processes $10 billion in payments annually, the company reported in July. The service is used by a number of startups and tech companies, including Airbnb, Fab, LivingSocial, Uber, Twilio, GitHub and others. In addition, Braintree operates Venmo, a mobile payments solution the company acquired last year for $26.2 million.
Though Braintree was an early mover in the online payments space, these days the competition with other services like Stripe and Balanced have been making things tougher on the company. Stripe has been especially successful in gaining traction with big e-commerce players, and earlier this month signed a deal for Shopify integration, which was notable. Meanwhile, Braintree has been following some of Stripe’s moves, such as with the launch of its Marketplace in August, which came after the debut of Stripe’s own Marketplace debut in June, for instance.
Braintree’s exec team has seen a lot of transition in recent years, too. Founder Bryan Johnson lost his position as CEO in late 2011. Current CEO Bill Ready took over, likely a decision made by Braintree lead investor Accel. Ready’s background includes a history of getting companies acquired – for example, he saw iPay sold to Jack Henry & Associates in June 2010.
To date, Braintree has raised $69 million in outside funding from Accel, NEA, RRE, Greycroft and others.
We’ve contacted Braintree, and PayPal for comment. A spokesperson for Square responded that the company does not comment on speculation or rumor.