PayPal Acquires Deal-Finding App Honey
Every day millions of users turn to PayPal to send money and make purchases. Now the FinTech is making a rather sizeable buy of its own. Last week the company announced that it would be acquiring Honey. For their purchase of Honey (or Honey Science Corporation as their formally known), PayPal will pay a whopping $4 billion. This amounts to the companies largest acquisition ever according to TechCrunch.
Started as a browser plug-in, Honey helps online shoppers score discounts by automatically trying various coupon codes that might apply to an order. Additionally the service has expanded to include Honey Gold, which is a Rakuten (formerly eBates)-type product that allows users to earn rewards on purchases. The company says it currently has 17 million active monthly users — an impressive figure, however dwarfed by the more than 275 million PayPal and Venmo have. Notably, however, Honey reports that customers have saved more than $1 billion in just the past year thanks to their service. At this time their browser plug-in and app works across 30,000 online retailers.
In a press release announcing the news, PayPal president and CEO Dan Schulman said of the deal, “Honey is amongst the most transformative acquisitions in PayPal’s history. It provides a broad portfolio of services to simplify the consumer shopping experience, while at the same time making it more affordable and rewarding.” Getting slightly more specific about how the services would integrate, Shulman added, “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers. As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales.” Meanwhile Honey co-founder George Ruan said, “Honey’s vision has always been to give consumers the tools they need to make the best decisions with their money. PayPal shares that vision and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”
Off the bat it seems that this deal is a major win for Honey. With greater access to PayPal’s massive userbase, this could easily help the service take on competitors like Rakuten and RetailMeNot. As for PayPal, it’s not quite as obvious what they’re getting for their $4 billion, although it does certainly help them diversify their revenue. In any case expect to hear much more about Honey and perhaps even see some FinTech-minded offerings from them in the future.