PayPal on Wednesday revealed plans to buy shopping and rewards platform Honey for roughly $4 billion.
Honey helps shoppers find savings on the web and on mobile, and its platform spans a mobile shopping assistant, an offers and rewards program and price-tracking tools and alerts. The online wallet and payments company wants to combine those capabilities with its PayPal and Venmo products.
Dan Schulman, PayPal’s president and chief executive officer, said, “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.”
The goal, according to PayPal, is to help consumers make informed choices earlier on and give merchants a way to bolster customer relationships, drive more sales and personalize offers.
The potential is not small. Honey serves some 17 million monthly active users, and it boasts that it has helped millions save more than $1 billion in the past year. Currently, the seven-year-old company works with about 30,000 online retailers, ranging from fashion and tech to food.
“Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants,” said Honey co-founder Ryan Hudson. “We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”
This isn’t PayPal’s first experience with shopping. Part of the company’s claim to fame was as an eBay subsidiary. It was spun off in 2015, and last year, eBay said that it would stop using the service for its back-end payments. The partnership is scheduled to end in 2020.
Enter Honey. When the deal is officially done, Honey plans to stay put in Los Angeles and Hudson and fellow co-founder George Ruan will retain leadership of their team. They will be considered part of PayPal’s global consumer product and technology organization, and the lead executives will report to PayPal senior vice president John Kunze.
According to the announcement, Honey was profitable on a net income basis in 2018. The acquisition is expected to close in the first quarter of 2020.