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Expansion of PayPal Startup Program Shows Landscape Heating Up


At Austin's SXSW today, PayPal announced an expansion to the Startup Blueprint Program it launched last October, the initiative that waives the first $50,000 in PayPal processing fees for selected U.S.-based startups.

Gil C /

The expansion will add 14 new incubators and accelerators, including TechStars, Entrepreneurs Roundtable Accelerator and Kima Ventures, among others. Thanks to PayPal's acquisition of payments gateway Braintree last fall, the program will also waive Braintree fees, such as those from credit cards, up to $100,000 in payment volume.

Additionally, startups in the program will gain a group of advisors who will be at the ready to help new businesses best utilize the PayPal platform and get through the crucial ramp-up period. The assistance will go beyond how to integrate the API and delve into nuts-and-bolts issues that can create huge obstacles for new entrepreneurs. "If you're struggling with what CRM to use, they'll be able to say, 'This is what we do,'" says John Lunn, head of developer relations.

The short-term goal, according to Lunn, is to bring up to 2,000 startups to this program by the end of the year, up from the 100 currently signed on. The long-term objective, of course, is to capture the latest startups as they are hitting it big, ensuring they use the PayPal platform.

Lunn said that as recently as 18 months ago, PayPal would reach out to new businesses only once they'd hit a certain amount of revenue. "That was a mistake because what's happening with startups now is that they're going from zero to the hottest thing around in 6 to 8 months," Lunn says. He says unless you have a relationship with that startup, before they hit it big, it can be too late to capture them for your platform.

The expansion highlights the intense competition to serve new companies in an ever-shifting landscape. "With this program, we're able to spot the startups that are earning revenue very, very quickly and make sure we are looking after them at an early stage," says Lunn. Those businesses will be comfortable with the PayPal platform, familiar with the service's customer support and hopefully won't go elsewhere, he says.

Getting ahead of the latest thing is critical for businesses like PayPal, says Lunn. Without such moves, he says, "in a couple of years every hot startup that's out there, every app on your phone isn't using PayPal and we become irrelevant."

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