I just signed up for Venmo and was looking to find out how they knew whom to recommend to me. I've concluded that it must be my phone number living in someone's smartphone, because nothing else makes sense.
I don't know for sure what mechanisms Venmo uses specifically, and I suspect that anyone who does is under non-disclosure, but it is common practice for "social" apps to use a number of signals to make correlations to construct your potential social graphs. See, for example, this very recent article on Facebook's "People You May Know":
How Facebook Outs Sex ...
They use your phone number when you signup. They then cross reference that phone number with peoples contacts who have already downloaded the mobile app and voila they recommend people who have your phone number stored on their phones. I know this because I just got a new phone and it only recommended people whom I gave my phone number to.
I speak from the same experience (and I'm a web developer). I looked at the list of suggested friends Venmo gave me upon joining (with a socially unconnected gmail address) and wondered the same. The friend pictures appeared to be from Facebook or IG which made me wonder if there was a facebook friend-list api that they accessed without permission. I ...
Partially in response to my badgering of Venmo, they've added the ability to block users:
1. Log in to the Venmo app on your iPhone or Android device
2. Tap the "☰" icon in the upper left hand corner of the app
3. Tap “Search People” to find the user that you want to ...