PayPal acquires comparison shopping plugin Honey for $4 billion

nanoguy

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Paypal has acquired Honey Science Corporation, the company that develops and maintains the popular Chrome extension, Honey, which finds coupon codes for you while you're shopping on one of over 30,000 online marketplaces.

The tool also has the ability to track the price of an item over time and let you know when it drops below a set threshold. Its most defining feature is the Honey Gold rewards program, which offers you points for using the service, which can eventually be turned into gift cards.

The new deal is estimated at $4 billion, and PayPal says the integration with Honey is meant to boost user engagement. PayPal CEO Dan Schulman goes as far as calling it "one of the most transformative acquisitions" in the company's history. Honey co-founders George Ruan and Ryan Hudson will also join PayPal along with 350 employees to work on product integrations and scaling up the deals network.

During an investor call, he said Honey's e-commerce suite can help PayPal simplify the shopping experience and improve its general services by understanding what makes consumers more likely to buy from a merchant. There is also the opportunity for PayPal to get a closer look at shopper demand curves and drive transactions by offering exclusive deals through its service.

PayPal has been trying similar things before with its Venmo payments app, but Honey is already much more popular among consumers, with revenues of $100 million and 100 percent growth in 2018. The new deal could extend its reach to over 275 million PayPal and Venmo accounts, and also aligns well with the latter's plan to launch a credit card targeted at younger consumers in 2020.

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