PayPal confirmed shopping for the deal-finding browser add-on Honey Science Corporation for $4 BILLION, the most important acquisition within the company’s two-decade history. The acquisition can provide the payments GIANT a foothold earlier in the customer’s shopping journey.
Honey claims to possess 17 million active monthly users to whom it offers a deal-finding browser extension to assist them to get the most effective costs at over 30,000 online retailers. Its coupon browser app offers cashback, tracks price drops, permits creating lists and participating in an Ebates-like rewards program known as Honey Gold. Its users have a tendency to be younger, millennial shoppers, each male and female.
As the biggest online-payment holding says, it sees value in combining shopping and rewards with payments as the takeover permits its two-sided network, which incorporates each PayPal and Venmo, to integrate new offerings and technology. It also plans to “transform the shopping experience” for PayPal’s 300 million active users while increasing sales and customer engagement for its merchants.
Honey’s performance last year
Last year, Honey publicly shared that it’s 10 million users managed to save more than $800 million using its tools. As of today, Honey’s 17 million contributors have saved greater than $2 billion to date.
“When Honey says they’re putting money in the wallet of their customers — that’s perfectly in keeping with what we want to do. We want to make virtual trade and economic services more affordable, less difficult to use, more fun and extra handy to people around the world,” says PayPal SVP of Global Consumer Products and Technology, and former Xoom CEO, John Kunze.
To date, Honey has managed to raise $49 million from investors. The company was already profitable on a net income basis in 2018, PayPal notes. The acquisition is expected to close in the first quarter of 2020, subject to regulatory approval. It’s expected to be accretive to PayPal’s non-GAAP earnings per share in 2021.
US-based PayPal is facing increased competition as more companies, including Apple and Samsung, improve their payment offerings. The company is also competing with its rival Square on more fronts, including digital payment tools at physical retailers. Square Inc., a payments company founded and run by Twitter business executive Jack Dorsey, was awarded last year with a coveted license to deal in cryptocurrencies in New York. On its half, PayPal pulled out of the coalition of firms involved in a Facebook-led cryptocurrency initiative, Libra Association.