Episode 11: PayPal

**Ben Gilbert** (0:00)
Yeah, in fact, there's Drake lyrics, I got enemies, got a lot of enemies. Got a lot of people trying to keep me from... Yeah, I don't know the rest, but it's great. Welcome to episode 11 of Acquired, the show where we talk about technology acquisitions that actually went well. I'm Ben Gilbert.

**David Rosenthal** (0:33)
I'm David Rosenthal.

**Ben Gilbert** (0:35)
And this is our show. Today, we are talking about eBay acquiring PayPal, an older acquisition, one that kind of set the tone for a lot of modern technology acquisitions, change the valley forever, birth the PayPal mafia, lots of great stuff to come. But first, I wanted to remind you, if you have not yet and you like the show, we would really appreciate a review on iTunes.

**David Rosenthal** (1:02)
And as always, hit us up on Twitter, Acquired, at Acquired FM, or at Gilbert, or at DJRosenthal. We love feedback.

**Ben Gilbert** (1:10)
We do. We promise we'll listen and try to make it better. We've heard rumors that audio is a little quiet in the past, so we're working hard to make sure that we release that appropriate listening volume now.

**David Rosenthal** (1:24)
We're iterating.

**Ben Gilbert** (1:24)
We are. We are. We're a little star up ourselves. It's cute. Also, I apologize for the last month of no episode. We got some people saying, finally, a new episode. I had ACL surgery, but I'm a real human now, and I'm fully off the oxycodone, so we're back in action.

**David Rosenthal** (1:42)
Should know Ben has been a real trooper here.
We were recording last time you were what, like five days post-surgery. Am I remembering that right?

**Ben Gilbert** (1:51)
Yeah, yeah. I was barely post-oxycodone. But yeah, stay away from the narcotics kids.

**David Rosenthal** (1:59)
That's my advice.

**Ben Gilbert** (2:01)
This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (2:06)
So Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose-built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (2:31)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (2:37)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, et cetera, and uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (2:55)
Yep. Obviously, it's a huge benefit for the environment and for customers on costs, since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (3:11)
It's super cool that they can put their data centers out there in these remote locations where quote-unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the internet happens because they are doing everything in their clouds.

**Ben Gilbert** (3:28)
Yep. If you, your company, or your portfolio companies would like to use the lower cost and more performant infrastructure for your AI workloads, go to crusocloud.com/acquired, that's crusoecloud.com/acquired, or click the link in the show notes.

**David Rosenthal** (3:45)
All right.

**Ben Gilbert** (3:46)
You, yeah, Acquisition History and Facts.

**David Rosenthal** (3:48)
Acquisition History and Facts. Man, I am excited for this episode. There is so much to dive into and unpack here.
I will get through the Acquisition History and Facts quickly. But first, a quick note. We are going to focus this show on the first act of PayPal, the founding, the acquisition by eBay, and then the first period of history thereafter. We may do a future show on the spinout that happened last year, where PayPal was spun back out from eBay. But, and we could also do another show on PayPal as an acquirer.

**Ben Gilbert** (4:28)
It's true. They themselves had done a few interesting ones, especially recently.

**David Rosenthal** (4:32)
So much interesting stuff with this company.

**Ben Gilbert** (4:34)
But there's definitely a whole episode for us to do.

**David Rosenthal** (4:36)
There's at least one more episode in the tank here. So with that, okay. So December 1998, Peter Thiel, Max Levchin and Luke Nozick found a company that they call Confinity and they decide to make an applications, a payment and cryptography service for Palm Pilots.