Honey is best known as a discovery tool, designed to help consumers find savings as they shop online. Once installed, Honey tracks price changes on retailer web sites; it also can automatically input coupon codes when a user enters an online checkout. If no coupons are available, Honey also may offer loyalty points that can be redeemed as gift cards.
Honey is profitable and generated revenue of approximately $100 million in 2018, working with 30,000 online retailers including Walmart, Macy’s, Etsy and Sephora and having 17 million monthly users. PayPal said Honey’s technology will help it reach consumers as they begin their shopping journeys with personalized, timely offers. Honey will source exclusive offers from PayPal’s network of 24 million merchant accounts.
“The proposed Honey deal represents a new breed of acquisition,” said Jason Kupferberg, analyst at Bank of America in a note to clients. “Historically, PayPal has mostly acquired payments companies, but by leveraging Honey’s platform, PayPal will be able to go deeper into the e-Commerce ecosystem by moving up to the front end of the shopping experience as opposed to being on the back end at checkout.”
Honey also could potentially integrate with PayPal’s Venmo money transfer service, which has more than 40 million users. Venmo plans to launch a credit card in 2020.
Following the acquisition, Honey will retain its headquarters and brand in Los Angeles. Honey Cofounders George Ruan and Ryan Hudson will continue to lead the Honey team as part of PayPal’s global consumer product and technology organization, reporting to SVP John Kunze.
Prior to the Honey deal, PayPal’s biggest purchase was last year’s $2.2 billion acquisition of iZettle, a Swedish payments company. Last year, PayPal went on an acquisition spree, buying global payment platform Hyperwallet for $400 million, fraud prevention platform Simility Systems for $120 million and Jetlore, an AI-powered prediction platform, for an undisclosed sum.
The companies expect the deal to close in Q1 2020.