Venmo started out in 2009 as a way for founders Andrew Kortina and Iqram Magdon-Ismail to pay each other without having to exchange cash or write a cheque. The first prototype worked over SMS, Andrew and Iqram would send notes alongside the cash to keep track of payments.
While SMS functionality died with the app launch in late 2010, the social element of Venmo remains one of the app’s core features. In early demos, Venmo founders proposed it as a way for musicians to sell songs and merchandise at live gigs, and as a way for students to pay their favourite food trucks.
Venmo uses peer-to-peer technology to send money online, and has recently started allowing users to hold money in the account. Users connect a debit or credit card to the app, which it can use to send and withdraw money from Venmo.
It took almost three years for Venmo to launch publicly, although iPhone and Android users could join through the app by September 2011. A few months after it officially launched, online payments provider Braintree acquired it for $26.2 million.
A year later, PayPal agreed to an $800 million purchase of Braintree, which included Venmo. This was back when PayPal was a growing subsidiary in the eBay behemoth, which it split from in 2015. In the split, PayPal took Venmo with it.
PayPal revolutionized the way people pay businesses online, but it never developed a system for paying friends easily. Venmo removed all transaction costs, allowing friends to send money online for free. This made it a major hit for people that don’t carry cash, like students and teens, which led to it entering the lexicon of technology brands that are also verbs.
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Learn moreVenmo generates revenue through a 2.9 percent transaction fee for businesses. Over two million merchants accept Venmo in the United States. Venmo also charges a one percent fee for users who want to withdraw money instantly to their linked card, usual withdrawals take one to two days.
PayPal sees Venmo’s social network as the potential revenue generator for the next decade. Users are able to spy on their friends, to see who they’re sending money to or what they’re spending it on. PayPal CEO Dan Schulman described this as the “secret sauce” in a 2015 interview.
It’s not clear how PayPal turns this social spying into income. It has been suggested some type of advertising platform, targeting users based on purchases or friend activity. Venmo could also use data shared to build an analytics platform for merchants.
Venmo has been the subject of several cyberattacks, as hackers use the social platform to scrape data on millions of transactions. The app has made changes to its API in the past year, alongside informative articles on how to keep payments private, but for many the allure of Venmo is the social network.
In the past two years, Venmo has seen significant growth from 10 million to 40 million users. In that time, it doubled revenue and tripled annual payment volume.
The seven largest banks in America launched a competitor to Venmo in 2017, called Zelle, which shares some of the similarities without the social platform. Zelle has gained a strong foothold in the US, but Venmo still holds a commanding lead in the under 35 age bracket.
Square’s Cash App is also competing for those customers and has seen a lot of success in 2020, by adding Bitcoin and investing services.
We have collected key data and statistics on Venmo. Read on below to find out more.
Venmo key statistics
- Venmo processed $159 billion in total payment volume in 2020, a 59 percent year-on-year increase
- Venmo generated $450 million revenue in 2020. PayPal projects it will make $900 million in 2021
- Over 50 million people use Venmo in the United States
- PayPal acquired Venmo in 2013 for $800 million, as part of its acquisition of Braintree
Venmo overview
| Launch date | August 2009 (March 2012 public launch) |
| HQ | New York City, US |
| People | Dan Schulman (PayPal CEO), Mark Britto (CPO) |
| Industry | Fintech |
| Business type | Subsidiary |
| Parent company | PayPal |
Venmo revenue
| Year | Revenue |
| 2017 | $160 million |
| 2018 | $200 million |
| 2019 | $300 million |
| 2020 | $450 million |
Note: PayPal estimates that Venmo revenue will reach $900 million in 2021
Sources: The Street, PayPal
Venmo annual payment volume
| Year | Total payment volume (TPV) |
| 2014 | $2.3 billion |
| 2015 | $7.5 billion |
| 2016 | $20 billion |
| 2017 | $34 billion |
| 2018 | $62 billion |
| 2019 | $101 billion |
| 2020 | $159 billion |
Sources: Fortune, Statista, PayPal
Venmo users
| Year | Users |
| 2015 | 3 million |
| 2016 | 5 million |
| 2017 | 10 million |
| 2018 | 23 million |
| 2019 | 40 million |
| 2020 | 52 million |
Note: PayPal refers to Venmo users as those who use the app more than once a year
Sources: The Street, Fast Company, Venmo
Venmo valuation
| Year | Valuation |
| 2013 | $0.1 billion |
| 2018 | $15 billion |
| 2020 | $38 billion |
Note: 2020 estimate comes from Venmo’s percentage of revenue generation for PayPal (16 percent).
Sources: Ark-Invest
Venmo vs competitors: TPV
Note: Each company declares volume differently, so it is not a 1:1 scale of how much transacting is done on each platform.
Venmo FAQ
How many US merchants accept Venmo?
Over two million merchants accept Venmo in the US
How much revenue does Venmo contribute to PayPal’s overall?
Venmo contributes approximately 16 percent of PayPal’s total
How many transactions does the average Venmo user do per month?
Users average five transaction per month
What is the average transaction amount on Venmo?
The average transaction amount is between $65-75 in the US (Ark-Invest)
What is the age demographics on Venmo?
50 percent of users are between the ages 25 to 34, 33 percent are between the ages 18 to 24
What are the gender demographics on Venmo?
61 percent of users are male, 39 percent are female (Mediapost)