The original alumni of the Silicon Valley behemoth, PayPal, have gone on to play a huge role in the tech ecosystem. Post the dotcom crash of 2001, these innovators are credited for spearheading the reemergence of consumer-focused tech. Since being bought out by Ebay in 2002, the original team behind the revolution, dubbed the “PayPal Mafia”, left to start their own ventures. In this article, we will look at the seven unicorn companies which were founded by PayPal alumni. The term Unicorn refers to companies valued more than $1 Billion.
Valuation – $40 Billion
Industry– Automotive and Energy
Key People– Elon Musk, CEO
Role In PayPal – He served as the CEO after his company X.Com merged with Confinity, a startup founded by Peter Thiel. He served as CEO for a short while and after it was sold to EBay, he received a large chunk of money due to his stake within the company.
Formerly known as Tesla Motors, the company was co-founded by Current CEO Elon Musk in 2003 and now has market cap of over $40 Billion. It is best known for its revolutionary a zero-emissions vehicle which have a self-driving capability. Key areas of focus include clean energy, with production of the Powerwall, a lithium ion battery which can power a two-bedroom house for an entire day. More recently, it has expanded its operations in this area by constructing a purpose-built facility in the Nevada Desert, known as the Giga Factory. It is also investing in Solar Energy, acquiring Solar City in 2016.
Valuation – $12 Billion (Private Company Estimate)
Industry – Space Exploration Technologies
Key People – Elon Musk, CEO
Founded in 2002 by Musk, Space X focuses on making space exploration more efficient through technological development, specifically re-usable rockets. The long-term vision is to create pioneering technology that will play a vital role in the future colonization of mars. In December 2015, it completed the first successful recovery of a first stage rocket that launched a payload into orbit. On 8th April 2016, it successfully launched and landed a rocket onto a drone ship, the first successful mission of its kind. With many more missions planned in 2017, Space X is and will continue to play a key role in space exploration technology.
Valuation – $26.2 Billion Acquisition by Microsoft 2016.
Industry – Employment and Professional Services
Key People – Reid Hoffman, Co Founder.
Role In PayPal – COO and VP
Following the 2002 PayPal acquisition by Ebay, Reid co-founded Linkedin with a former colleague from his time at Fujitsu, Allen Blue. It Launched in May 2003 as the first business focused social network, with early investors being Reid’s former PayPal colleagues, Peter Thiel & Keith Rabois. Reid served as the founding CEO and later became the chairman. He oversaw the 2011 IPO in which his is own personal stake grew to $2.4 billion. 13 years after its launch, Linkedin has 467 million users and is regarded as the most important platform in the employment and professional services space. It hit the headlines in 2016 when it was acquired by Microsoft in $26.2 billion cash deal.
Valuation – $1.65 Billion Acquisition by Google
Industry – Video Sharing Platform
Key People –Steve Chen, Jawed Karim & Chad Hurley, Co-Founders.
Roles In Paypal – Karim (Engineer), Hurley (Graphic Designer) & Chen (Engineer).
The video sharing platform was the brainchild of these three PayPal alumni who joined forces after leaving the company in the early noughties. Although a Co-Founder, Karim chose not to become a company employee and assumed the role of special advisor due to educational commitments. Chen was the founding CTO and Hurley was the CEO. YouTube activated in February 2005, with Karim uploading the first video titled ‘Me at the Zoo’ in April of that year. At the time of the official launch In December 2005 it was estimated the site had 8 million unique visitors daily and by early 2006 over 60,000 new videos were uploaded every day. This caught the attention of Google who acquired the company in 2006 for $1.65 Billion Dollars. On a daily basis in 2017, Youtube attracts 30 million visitors, viewing 5 billion videos and uploading over 300 hours of content every minute . Having now crossed the $10 Billion revenue mark, Meryl Lynch predicts YouTube to have a standalone value of $90 Billion, accounting for 20% of Alphabets market cap.
Valuation– $20 Billion (Private Company Estimate)
Key People– Peter Thiel, Co-Founder
Role In Paypal– Founder of Confinity, the organization which first created the digital wallet known as Paypal which then grew due to mergers with companies like X.com.
With the name inspired by the seeing stones in lord of the rings, Palantir is a big data company which was co-founded by Thiel in 2004. The company received its first investment from intelligence agency based VC arm, In-Q-Tel Ventures. The company provides data analysis and solutions for three areas, Legal Research, Finance & Government. It provides analysis on key data and allows it to be visualized in a more simplistic manner via a simple, easy to use interface. It is said that Palantir played a huge role in the mission which lead to the capture of Osama Bin Laden. Initially it served government only, now its client lists go from hedge funds to government agencies. With Thiel gaining even more leverage after being made special advisor by the POTUS, Donald Trump, Palantir will continue to grow and through innovation revolutionize the data analytics and visualization space.
Valuation– $2.6 Billion
Function– Crowd Sourced Review Platform
Key People– Russel Simmons & Jeremy Stoppleman, Co-Founders.
Role In Paypal– Russel Simmons (Lead Software Architect), Jeremy Stoppleman (VP, Engineering)
The idea for the online review platform was conceived by an ill Jeremy Stoppleman struggling to find reviews for doctors online. He partnered with former PayPal Colleague Russel Simmons to create Yelp, which launched initially as an email recommendation service, later changing into an online crowd sourced review platform. An Initial investment of $1 million was provided by another PayPal alumni, the former CTO Max Levchin. After turning down a $550 Million buyout offer from Google, Yelp filed for IPO in 2012, eventually raising $90 million at a valuation of $900 Million. The road to success however hasn’t been smooth, with increased completion and accusations of malpractice made on google. However in 2016 the company posted revenues of $710 Million and a net profit of $449,000, up from a $1.2 Million loss the year before. The number of unique devices that accessed yelp has risen by 27% from the year before, with the number of unique visits being around 23 million people per month. Having shut down international operations to focus on the North America market, Yelp aims to develop further and exceed its current market cap of $2.8 Billion.
Valuation– $1.2 Billion Acquistion (2012)
Industry– Enterprise Social Networking Service
Key People– David Sacks, Founder
Role In Paypal– COO
The interoffice communication tool was founded by the former COO and original PayPal alumni, David Sacks. At the time David was running the genealogy platform Geni.com and created Yammer as a tool for sharing ideas and collaborating within a workplace. However, it was launched independently and made available commercially in 2008. Eventually in 2012 the company was acquired by Microsoft for $1.2 Billion and David Sacks remained a key figure in the business.