Home / Business / PayPal Acquires Honey Shopping and Reward Platform for $ 4B – TechCrunch

PayPal Acquires Honey Shopping and Reward Platform for $ 4B – TechCrunch

PayPal today announced that it has agreed to sell Honey Science Corporation, the maker of a browser add-on and a mobile application for $ 4 billion in search of a deal to acquire, mostly in cash. The acquisition, which is PayPal's largest to date, will allow the payment giant to enter the customer's shopping journey earlier. For example, rather than competing on the checkout side with credit cards or Apple Pay alone, PayPal will be one step ahead to become part of the deal discovery process.

Honey's monthly 17 million active users now benefit from a number of money-saving tools that allow you to track prices, view alerts, generate lists, search deals, and participate in an Ebates-like rewards program called Honey Gold. Users are typically younger, millennial buyers, both male and female.

PayPal wants to incorporate Honey & # 39; s technology into its own product line and extend its reach to PayPal's 300 million users.

"The exciting thing is we can do it The features that Honey now offers ̵

1; product discovery, price tracking, offers and loyalty – and that feed into PayPal and Venmo experiences," explains PayPal SVP of Global Consumer Products and Technology and the former CEO of Xoom, John Kunze. "When Honey says they put money in their customers' pockets, it's a perfect match for what we want to do, and we want to make digital commerce and financial services more affordable, more user-friendly, more entertaining, and more accessible to people around the world. "

In addition, PayPal's network of 24 million merchants will be offered the opportunity to offer deals Targeted and personalized consumer promotions to open new business opportunities and increase sales." PayPal credit can also be integrated with Honey to To finance larger purchases.

Honey has flown to some extent under its radar since its inception in 2012.

Originally, Honey was just a web browser extension promo code for retailers and retailers as a rival to RetailMeNot and others, what makes the extension so useful is that they automatically check out all eligible coupon codes for you upon check out, then select the one that has made the most savings and apply on your behalf. This helps buyers feel more comfortable with their purchases and reduces the shopping cart's absence.

The company has also introduced features that allow shoppers to be aware of the price history of an item, including historical prices for each product on the Amazon market. In 2017, Honey DropList launched to alert consumers to lower pricing and travel discovery tools.

The more consumers shifted their purchases to e-commerce retailers, the more Honey took advantage of the customer base.

The browser extension now works on some 30,000 merchant sites, including fashion, technology, travel and even pizza delivery. Last year, Honey publicly announced that his 10 million members had used his tools to save over $ 800 million. To date, Honey's 17 million members have saved more than $ 2 billion.

"Honey is one of the most transformative acquisitions in PayPal history. It offers a broad service portfolio to simplify the consumer shopping experience while making it more affordable and rewarding, "said Dan Schulman, PayPal's President and CEO, in a statement.

"The combination of Honey & Complementary Consumer Products with our platform will greatly enhance our ability to drive engagement and play a more important role in our consumers' daily lives. As a preferred partner to our dealers, we can also help them build and strengthen their customer relationships, deliver personalized offerings, and increase sales. The combination of Honey and PayPal gives our two-page platform another significant and meaningful dimension. "

The acquisition also offers PayPal the ability to defend against Apple's growing competition from Google, Facebook, and other technology companies that have entered the payments market in recent years. For example, CEO Tim Cook stated in Apple's fourth quarter earnings pickup in 2019 that Apple Pay exceeded PayPal's transaction volume with 3 billion transactions in the quarter. Meanwhile, analysts predict that Facebook Pay has the potential to eliminate both Apple Pay and PayPal alike.

Then there are the original rivals of PayPal – the world's largest card networks such as Visa, Mastercard, American Express and Discover. These companies are also struggling to stay relevant online and have their own new PayPal competitor to facilitate online checkout.

With Honey, PayPal immediately shifts the fight away from the checkout page itself and instead goes against all the places customers go to discover, browse, get inspired and bargain-hunt – directly on the retailers' websites or on newer platforms like Pinterest or Instagram Shopping Ruan and Ryan Hudson will be working on product integration at PayPal, scaling the technology to a much larger user base. Also a member of Honey is the predominantly LA based team of 350 employees.

The Honey team and headquarters remain in LA, where they have just signed a lease for a new office space with a view to expansion targets.

PayPal's benefits and reach enable us to create powerful new online shopping experiences for consumers and merchants with our technology, "said Hudson. "We will have the opportunity to help millions of retailers reach consumers with deals that are becoming increasingly valuable to Honey members."

To date, Honey has raised $ 49 million from investors including Ludlow Ventures, Zuma Partners, Mucker Capital, SXE Ventures, BAM Ventures, Plug & Play, Wonder Ventures, Cendana Capital, Anthos Capital and others, according to Crunchbase.

As early as 2018, Honey was profitable on a net income basis, PayPal reports. The acquisition is expected to close in the first quarter of 2020, subject to regulatory approval. PayPal is expected to make a positive contribution to non-GAAP earnings per share in 2021.

PayPal will hold a conference call today at 2:00 pm PST to further discuss the transaction.

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