March 6, 2001 8:25 AM PST

PayPal closes $90 million in equity financing

PayPal, whose system lets Web users send and receive money instantly, announced the completion of $90 million in financing Tuesday.

The Series D funding round came from reputable foreign banks including Spain's Bankinter and Japanese Internet bank eBank. Other investors in the funding round, which closed Feb. 16, include ING Group, Providian Financial and leading French retail bank Credit Agricole.

In total, PayPal has raised approximately $225 million in equity financing, including a $100 million Series C round announced in April 2000, according to the company.

Services that allow people to send money via e-mail have exploded in popularity over the last year as more individuals and businesses conduct transactions online. The size of PayPal's audience alone has mushroomed to more than 6 million in just over a year. Venerable offline banks including Citibank and Wells Fargo have also gotten in on the act. In the past year, Citibank launched c2it and Wells Fargo joined forces with eBay to create Billpoint.

Still, the online payment industry has struggled to generate enough revenue. To meet its revenue goals, PayPal has forged alliances, including a partnership with Providian Financial, announced last month, to create a co-branded credit card.

PayPal CEO Peter Thiel congratulated his company on securing more funding in today's slow economic market.

"In light of current economic and private capital market conditions, this is a testament to the value of the PayPal service and to the efforts of the PayPal team," Thiel said in a statement. "As business and consumer adoption of PayPal has continued to grow, so has partnership and investment interest."

 

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