PayPal Makes a ‘Modest’ Purchase

The acquisition of the Modest mobile e-commerce platform is PayPal's first since its split from eBay.
Katie Kuehner-HebertAugust 19, 2015

In its first acquisition since it spun off from eBay, PayPal is  buying Modest, a Chicago startup that builds mobile e-commerce applications for small businesses.

While PayPal did not disclose the terms of the deal, the  company said Modest would be integrated into its Braintree unit based in Chicago.

Modest was founded in 2013 by four engineers for President Barack Obama’s re-election campaign and only has a handful of small-business clients after launching at the beginning of this year, according to Forbes. Modest co-founder and chief executive Harper Reed said the startup and PayPal have “synergy” and the deal would put his company’s offerings in front of thousands of PayPal merchants.

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“E-commerce is a tried and true way to make money on the Internet and yet it’s so untapped in various aspects of our lives,” Reed, the former CTO of Obama for America, told Forbes, citing the lack of “buy” buttons on most sites.

“We want to create commerce where commerce doesn’t yet exists,” he explained. “Think of it like putting a buy button where a buy button belongs, but where they haven’t gone yet.”

With Modest’s platform, businesses can easily create their own app or integrate their stores within existing apps, according to Business Insider. Additionally, the company provides tools to help merchants add buy buttons into other channel marketing efforts while also selling products on third-party sites.

“PayPal will leverage Modest’s capabilities to tackle contextual commerce,” Business Insider said. “This is a new category of shopping that leverages data and current circumstances to market to consumers something that they’d find interesting.”

In the months leading up to its split with eBay, PayPal acquired technology startup Paydiant for $280 million and international money transfer company Xoom for $890 million.