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PayPal CEO Dan Schulman Reveals Why He Withdrew From Facebook’s Libra Project

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When Facebook’s ambitious cryptocurrency project Libra launched in June, a total of 28 companies signed on to be part of The Libra Association. The consortium of companies, including PayPal, Visa, MasterCard, and Coinbase, would help build and operate services around the project. 

In October, PayPal became the first company to walk away from The Libra Association without citing a specific reason, only that it decided “to forgo further participation in the Libra Association at this time and to continue to focus on advancing our existing mission and business priorities as we strive to democratize access to financial services for underserved populations.”

Last week, PayPal CEO Dan Schulman stopped by Fortune’s offices to meet with several reporters and editors. We spoke about a wide variety of subjects — so wide, in fact, that I learned he does martial arts in the morning and his resting heart rate is 48 beats per minute. (Compare that with mine, which is a coffee-fueled 71. 💀)

But my questions focused on PayPal’s relationship with Libra and the company’s own work in the cryptocurrency realm. Here’s what Schulman said.

FORTUNE: Why did you decide to withdraw from The Libra Association?

When David Marcus [Facebook’s head of Libra] came to talk to us about Libra initially, he framed it in ways that were appealing to us about financial inclusion. We’re always exploring the next generation of technologies — like blockchain infrastructure to do things more efficiently. And you know, we’d like to learn more about it. All of us were interested in learning more. As we learned more about [Libra] and saw the amount of things that were still left to do and the amount of things we still had to do on our own roadmap outside of Libra, we said, “You know, we think if we focus on our own roadmap, we’d be able to advance financial inclusion faster than if we put all these resources against Libra.” 

It wasn’t an acrimonious divorce or anything like that. It’s just that they will start going down a road that we’re very interested in looking at and monitoring, and maybe later, there are ways we can work together. I wish them the best of luck on it. 

Was it because you were spooked by the regulatory scrutiny? 

Regulatory and compliance, for us, is foundational. But we have an extremely robust relationship with every regulator out there. We are extremely trusted on that. That wasn’t really what spooked us on it. It was just about, “Where do we want to put our attention, and what do we want to do today to advance our mission?” Once they start figuring things out, we’ll take another look at where they are.

Earlier this year, PayPal’s CFO John Rainey said the company had teams working on blockchain and cryptocurrency. Can you share a little more about what they’re working on? 

Yes and no. Some of this is competitive, and we don’t really want to … 

Is it competitive with Libra?

No, it’s not necessarily competitive with Libra. It’s just a competitive advantage. Like, you might ask what’s our next product that’s coming out or what’s our next acquisition. I probably can’t tell you about those either. 

We think there’s a lot of promise to blockchain technology. It’s intriguing to us, but it really needs to do something that the traditional rails can’t do. Most people think that blockchain is about efficiency, but the system today is pretty efficient. There are middlemen sometimes in between, but the rails of it are pretty efficient. So we think a lot of the neat stuff that can happen on blockchain is around identity, for example. 

It’s about the applications on top of it, not necessarily using it to lower the cost by one-eighth of one eighth of a fraction. By the way, if it does turn out to be a lower-cost infrastructure, all of us will move to it. 

On the crypto side, it’s still very volatile, and therefore, we don’t have much demand for it by merchants because merchants operate on very small margins. And what they have to do is immediately turn it into fiat, and there’s a fee for turning it into fiat, so any advantage in cost is typically eaten up by that conversion fee. Until it becomes less volatile, it won’t be a currency that is widely accepted by merchants on the web — not the dark web, but the web. 

That doesn’t mean that I don’t think crypto is an interesting idea and that people are trading it quite a bit. It’s more commodity-like than it is cash-like right now. But you can think of use cases in different countries and different places where it can be more stable than the alternatives.

Do you personally own any cryptocurrencies?

Yes. Bitcoin. 

Only Bitcoin?

Only. Yes.

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Polina Marinova
Twitter: @polina_marinova
Email: polina.marinova@fortune.com 

VENTURE DEALS

Vayyar Imaging, an Israel-based developer of 4D radar imaging sensor technology, raised $109 million in Series D funding. Koch Disruptive Technologies led the round, and was joined by investors including Battery Ventures, Bessemer Ventures, ICV, ITI, WRVI Capital, and Claltech.

CloudFactory, a Durham, N.C.-based provider of managed workforce solutions for artificial intelligence, raised $65 million in funding. FTV Capital led the round, and was joined by investors including Weatherford Capital

Vouch Insurance, a San Francisco-based platform offering business insurance for startups, today raised $45 million in Series B funding. Y Combinator Continuity led the round. 

Aerospike, a Mountain View, Calif.-based provider of real-time NoSQL data solutions, raised $32 million in Series D funding. Triangle Peak Partners LLC led the round.

Fermented Sciences, a maker of the organic hard kombucha brand Flying Embers, raised $25 million in Series B funding. Ecosystem Integrity Fund and PowerPlant Ventures co-led the round, and were joined by investors including Blueberry Ventures and Monogram Capital Partners. 

GoExpedi, a Houston, Texas-based e-commerce, supply chain and analytics company, raised $25 million in Series B funding. Top Tier Capital Partners led the round, and was joined by investors including CSL Ventures, Crosslink Capital, Bowery Capital, and Blue Bear Capital. 

Starburst, a Boston-based company focused on redefining the modern data warehouse architecture with its enterprise-ready Presto offering, raised $22 million in Series A funding. Index Ventures led the round.

Proletariat Inc, a Boston-based independent game developer, raised $20 million in Series C funding. Take-Two Interactive Software Inc led the round, and was joined by investors including Spark Capital and FirstMark Capital.

Wellframe Inc, a Boston-based provider of digital health management solutions, raised $20 million in Series C funding. BlueCross BlueShield Venture Partners led the round, and was joined by investors including Threshold Ventures and F-Prime Capital.

CyCognito Inc, a Palo Alto, California and Israel-based cybersecurity startup, raised $18 million Series A funding. Lightspeed Venture Partners led the round, and was joined by investors including Sorenson Ventures.

Active Navigation, a U.K.-based data privacy and governance software provider, raised $11 million in funding. Mobeus led the round.

ZecOps, a San Francisco-based cybersecurity firm, raised $10.2 million in seed funding. Investors include CEAS Investments, Evolution Equity Partners, KPN Ventures, Plug and Play Ventures and Stormbreaker Venture Group.

Pensa Systems, an Austin, Texas-based developer of autonomous perception systems, raised $10 million. Signia Venture Partners and ATX Venture Partners co-led the round, and were joined by investors including Commerce Ventures, Capital Factory, Revtech Ventures, and ZX Ventures.

Perlego, a London-based streaming service for educational books, raised $15 million in Series A funding. Investors include Charlie Songhurst, Dedicated VC, Thomas Leysen, ADV, Simon Franks and Alex Chesterman. 

Tridge, a sourcing platform connects agriculture importers and suppliers, raised $5.5 million in Series A funding. Investors include Activant Capital, SoftBank Ventures Asia and Forest Partners

Acquire, a San Francisco-based enterprise platform, raised $5.4 million in seed funding. S28 Capital led the round, and was joined by investors including Fathom Capital and NHN Ventures.

Shield Compliance, a Seattle-based provider of compliance management platform to financial institutions serving legal cannabis markets, raised $5 million in Series A funding. Copia Investments led the round.

Causaly, a London-based AI company teaching computers to read, understand and interpret all biomedical knowledge, raised $4.8 million in Series A funding. Pentech Ventures led the round, and was joined by investors including EBRD Venture Capital and Marathon Venture Capital. 

Bunch, a New York-based party app for mobile games, raised $3.85 million in funding. Investors include Supercell, Tencent, Riot Games, Miniclip and Colopl Next.

Remrise, a sleep care brand, raised $8.2 million in seed funding. Founders Fund led the round, and was joined by investors including Felicis Ventures, Maverick Capital, Jerry Yang and AME Cloud Ventures, David Bell and Idea Farm Ventures, West Ventures, Signia Venture Partners and Atomic.

Dream Games, a Turkey-based mobile gaming company, raised $7.5 million in seed funding. Makers Fund led the round, and was joined by investors including Balderton Capital. 

Studs, a New York-based ear piercing company, raised $3 million in funding. First Round Capital led the round, and was joined by investors including Lerer Hippeau.

Kimai, a London-based fine jewelry brand, raised $1.2 million in seed funding. Talis Capital led the round.

HEALTH & LIFE SCIENCES DEALS

TISSIUM, a Paris-based life science company developing fully synthetic, biomorphic programmable polymers, raised €38.75 million ($42.78 million) in Series B funding. Investors include BNP Paribas Développement, the European Investment Fund (EIF), M&L Investments, ValQuest Partners, Bpifrance, CM-CIC Innovation, Cap Décisif Management, Omnes Capital and Sofinnova Partners.

PRIVATE EQUITY DEALS

Walter Capital Partners agreed to acquire a significant stake in Athos Services Commémoratifs, a Canada-based funeral services company. Financial terms weren’t disclosed.

Marlin Equity Partners acquired Wax Digital, a U.K.-based provider of sourcing and procurement solutions. Financial terms weren’t disclosed. 

Advent International agreed to acquire Olaplex, a Santa Barbara, Calif.-based prestige and professional hair care brand. Financial terms weren’t disclosed. 

FIRMS + FUNDS

NovaQuest Capital Management, a Raleigh, N.C.-based private investment firm, raised $275 million for its fund, NovaQuest Private Equity Fund I, L.P.

CAVU Venture Partners, a New York-based venture capital and private equity firm, raised $250 million for its third fund. 

PEOPLE

Searchlight Capital Partners named Andrew Claerhout as a partner.

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