Online payments and money transfer platform PayPal Holdings, Inc has made an agreement with Honey Science Corp, a company that owned Chrome extension honey which helps find the best deals, coupons, and rewards while you are doing online shopping and apply the maximum discount when you checkout.
An official financial release from PayPal states that it has agreed to acquire Honey, a rapidly growing technology platform for shopping and rewards, for approximately $4 billion. The deal will be in cash according to TechCrunch.
Honey currently works with approximately 30,000 online retailers and merchants. It also gives its users a rewards program, known as Honey Gold, which provides you with “Gold” for using Honey.
They aim that PayPal’s two-sided network, now along with Honey will transform the online shopping landscape for consumers by giving a boost to sales and will increase customer engagement with the merchants.
It is a shift from PayPal’s core payment business. Besides its traditional rivals like Visa and MasterCard, PayPal also needs to fightback after the emergence of Apple Card, Facebook Libra, and Google Pay. This acquisition may help PayPal to prove its dominance.
The tweet from @PayPalNews features a video describing the worth of this merger. On the other hand, Honey in their co-founders jointly written article, call it the beginning of the next stage of their growth.
Established in 2012, Honey is a widely acknowledged tool that helps consumers to save money while shopping online. This web browser extension has continued to grab attention when it expanded its line of products and services, and a mobile shopping assistant.
With their approximately 17 million monthly active users, Honey claims that it has rescued $1 billion of millions of people in savings in the past year. Paypal aims to take numbers as high as 300 million by integrating it into its ecosystem. With Honey and Venmo, they think it would make e-commerce, online shopping and money transfer more conveniently accessible to a large community of consumers using their platform.
Dan Schulman, president and CEO of PayPal made a statement,
“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 and PayPal adds another significant and meaningful dimension to our two-sided platform.”
Moreover, Honey will remain in its existing office space in Los Angeles, California. Honey co-founders George Ruan and Ryan Hudson along with their team of 350 employees will work under the supervision of John Kunze, Senior Vice President of global consumer product and technology.
Honey co-founder George Ruan said in a statement that, “PayPal shares that vision and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”
According to PayPal, this investment is expected to increase the non-GAAP earnings per share of PayPal in 2021. It is expected that this deal of merger will be made close in the first quarter of 2020. Reuters reported that Paypal shares decreased 2 percent after the announcement.
Featured image: PayPal