Online-payments giant PayPal Holdings on Monday confirmed the completion of its buyout of deal-finding browser add-on Honey Science Corporation for $4 billion, the biggest acquisition in the company’s two-decade history.
Honey claims to have 17 million active monthly users to whom it offers a deal-finding browser extension to help them get the best prices at more than 30,000 online retailers. Its coupon browser app also helps customers with finding the best deals on Amazon purchases, offers cashback, tracks price drops, and more.
The payment giant said it sees value in combining shopping and rewards with payments as the takeover allows its two-sided network, which includes both PayPal and Venmo, to integrate new offerings and technology. It also plans to “transform the shopping experience” for PayPal’s 275 million active users while increasing sales and customer engagement for its merchants.
PayPal’s presence in the e-commerce space
The deal comes at a time when Honey is growing in popularity among online shoppers as it automatically applies coupon codes at checkout. In 2018, Los Angeles-based startup, which was founded in 2012, reported $100 million in annual revenue, and with its current growth pace, it would have hit $200 million in 2019.
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The acquisition also boosts PayPal’s presence in the e-commerce space at a time when competition in the sector is increasing. It also makes strategic sense for the company as it helps deepen its footprint and catapult PayPal into the customer’s journey throughout the purchase funnel, from discovery to purchase and payment.
“The addition of Honey to our platform enables a significant step forward in our commitment to provide powerful services and tools for merchants and consumers, move beyond our core checkout proposition and significantly enhance the shopping experience for our 300 million consumers and merchants,” said Dan Schulman, president and CEO of PayPal.
US-based PayPal is also facing increased competition as more companies, including Apple and Samsung, improve their payment offerings.
PayPal is also competing with its rival Square on more fronts, including digital payment tools at physical retailers. Square Inc., a payments company founded and run by Twitter CEO Jack Dorsey, was awarded last year with a coveted license to deal in cryptocurrencies in New York. On its part, PayPal pulled out of the coalition of companies involved in a Facebook-led cryptocurrency initiative, Libra Association.