PayPal buys start-up set up by Obama campaign CTO

Online payments giant PayPal has made its first acquisition since its recent split with eBay, buying mobile commerce start-up Modest for an undisclosed sum.

Chicago-based Modest was founded in 2012 by Harper Reed and Dylan Richard. Mr Reed previously served as chief technology officer for President Obama's re-election campaign, while Mr Richard was its lead engineer.

Modest, which is a mobile commerce platform for small businesses, is set to join PayPal's Braintree business, a start-up that the payments firm acquired for $800 million in 2013.

"Contextual commerce is an exciting opportunity for PayPal, representing a new frontier for commerce that is rapidly growing. The acquisition of Modest will help us do amazing things in this area, faster than ever before," said Bill Ready, senior vice president, global head of merchant and next generation commerce, PayPay.

“For merchants, this means PayPal will be able to offer a complete commerce solution (payments and order management) to help them add contextual commerce channels to the ways that they sell to their customers. For consumers it will mean seamless, simpler, and safer ways to buy the things they want, anywhere they discover them,” he added.

PayPal joined the S&P 500 last month after splitting from eBay. Shortly before the split, the company acquired money transfer company Xoom for $890 million.

PayPal’s revenue jumped 19 per cent to $7.9 billion last year.