PayPal acquires StackMob to build a better platform — especially for mobile

How do you modernize an aging technology stack quickly? For PayPal, it’s by snapping up a much smaller company that does exactly what you want.

PayPal announced today that it has acquired StackMob, a backend-as-a-service company that helps developers easily implement features in mobile apps. You could, for example, use it to add social network logins and push notifications to your app. Terms of the deal weren’t disclosed.

StackMob will join PayPal’s core engineering team to help refresh its platforms, which should help the payments giant when it comes to developing future apps and services, as well as help developers who want to tap into PayPal’s APIs and services, PayPal CTO James Baresse told VentureBeat in an interview. Since StackMob has focused on mobile so far, it will end up beefing up PayPal’s own mobile offerings (the company launched a massive redesign of its mobile apps back in September).

“They’ve proven the ability to build really flexible and solid platforms,” Baresse said. “When you look up and down at PayPal, we are rapidly expanding and in many case rewriting parts of our backend. Given our need to have really amazing services, both for internal engineers as well as our external experience, we need experience on how you build these things out at scale.”

Throughout my many conversations with PayPal over the past few years, the company has reiterated the need to modernize its technology. But while it’s made some advancements on its own, it’s often chosen to snap up startups that can give it an immediate leg up. Case in point: After spending a year trying to revamp its APIs, it ended up buying Braintree for $800 million earlier this year, which will give it a much more advanced (and developer friendly) API platform.

“The whole backend-as-a-service idea is about lowering barriers to successful mobile development,” StackMob founder and CEO Ty Amell told me. “I think PayPal is uniquely positioned to really lower the barriers there [as] no one else [can].”

Amell says all of StackMob’s technical team, as well as most of its non-technical team, will be headed to PayPal’s headquarters in San Jose. When asked if StackMob will continue to operate as normal (its existing customers include Box, AT&T, and Verizon Wireless), he said it was too early to tell since the acquisition just closed today.

If you’re a StackMob customer, it’s probably time to consider other options.

StackMob has raised $7.5 million so far from Trinity Ventures, Harrison Metal Capital, and Baseline Ventures.