Deal gives ecommerce platform access to PayPal’s 24 million merchant accounts
PayPal has agreed to buy Honey Science, a technology platform for shopping and rewards, for $4 billion (£3 billion), in what CEO Dan Schulman described as “amongst the most transformative acquisitions in PayPal’s history.”
The acquisition will massively broaden the reach of Honey, which has approximately 17 million monthly active users; it will now gain access to PayPal’s 300 million user and 24 million merchant accounts.
Consumer VC just got its Zoom/Slack. What an execution monster of a company. https://t.co/QcIQ9q5JuZ
— Andy Manoske (@a2d2) November 21, 2019
Honey Science, which has partnered with 30,000 merchants, notifies consumers when prices drop, via a patented plugin. (“A computer system is configured to directly interface with a website via a webpage to change certain numerical values through the use of digital codes. The digital codes are applied to a data entry interface on the webpage, and the responses are monitored and transmitted back to a server system…”) It has a team of 350.
PayPal’s Schulman said: “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement… As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales.”
LA-based Honey was originally founded as a web browser extension and has grown into a suite of free tools. It claims to have helped consumers save $1 billion in the past year alone. Honey was profitable on a net income basis in 2018, and the acquisition is expected to add to PayPal’s non-GAAP EPS in 2021.
e-commerce and consumer internet companies raised over US$7 billion in PE/VC capital in 2018, EY estimated early this year.