PayPal has acquired Honey, a shopping and rewards technology platform for US$4 billion. The deal is expected to close in the first quarter of 2020.
The payments giant said the deal enhances its value proposition with an extensive set of consumer commerce capabilities.
Honey was founded in 2012 and helps its users find deals online through various ecommerce sites.
According to both companies this acquisition supports PayPal and Honey’s shared mission to “simplify and personalise” shopping experiences for consumers while driving conversion and increasing consumer engagement and sales for merchants.
The combination will help accelerate growth across both companies. Honey will accelerate its growth by driving adoption among PayPal and Venmo’s more than 275 million active consumer accounts and sourcing exclusive offers from PayPal’s extensive network of 24 million merchant accounts.
Honey said it will enable PayPal to reach consumers at the beginning of their shopping journeys and will enhance PayPal’s ability to help merchants acquire and convert consumers by delivering offers that are personalised, timely, and optimised across channels. It has expanded its suite of products and services to include a mobile shopping assistant, offers and rewards program, and price-tracking tools and alerts.
The service has approximately 17 million monthly active users, and according to Honey it has helped millions of people find more than US$1 billion in savings in the past year. Honey currently works across approximately 30,000 online retailers ranging from fashion and technology, to travel and pizza delivery.
Dan Schulman, president and CEO of PayPal said, “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.
“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 personalised offers, and drive incremental sales. The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform.”
Following the acquisition, Honey will retain its brand and the headquarters will stay in Los Angeles, California. Honey co-founders George Ruan and Ryan Hudson will continue to lead their team as part of PayPal’s global consumer product and technology organisation, reporting to Senior Vice President John Kunze.
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.”
Hudson said, “Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants.
“We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”