Article

PayPal acquiring digital shopping, rewards platform for $4B

PayPal agreed to buy the online shopping and rewards platform in a bid to extend its services to help drive more personalized traffic towards its thousands of retail partners. Honey has helped consumers save more than $1 billion through targeted discounts and incentives.

Honey co-founders Ryan Hudson and George Ruan will continue to run the company operations.

December 20, 2019 by David Jones — Editor, Networld Media Group

PayPal Holdings Inc. entered a $4 billion cash agreement to buy Honey Science Corp., a technology platform that helps merchants develop targeted shopping and rewards for their customers.

The Los Angeles-based firm, which has 17 million monthly active users and 30,000 online merchant partners, provides a mobile shopping assistant, rewards program and other tools to help retailers provide discounts and rewards to their customers. 

PayPal officials said the acquisition, one of the largest in the history of the company, would be transformative to its business model.

"It enables a large step forward in our commitment to provide powerful services and tools for merchants and consumers, move beyond our core checkout proposition and significantly enhances the commerce experience for our 300 million total customers," PayPal CEO Dan Schulman said on a conference call late Tuesday.

The company will continue to operate under its own brand from its Los Angeles headquarters, and co-founders George Ruan and Ryan Hudson will continue to run Honey's day to day operations as part of PayPal's global consumer product and research organization, reporting to Jon Kunze, a senior vice president at PayPal.

"By joining forces, Honey will be able to build products faster, connect with more merchants, and most importantly, help people save money on a massive scale," Ruan and Hudson said in a blogpost. 

PayPal officials said that Honey will allow it to drive adoption to the PayPal and Venmo user platform by developing personalized offers from its 24 million merchant accounts that accept the cards, giving their customers the ability to get unique discounts, rewards and other incentives to make purchases. 

Honey works with major retail brands, including Walmart, Priceline, Etsy, Expedia, Macy's, Sephora and others. The company had revenue of more than $100 million in 2018 and operated with a profit. 

Schulman said that with the new acquisition, PayPal plans to "simplify the digital shopping experience, while making it easier for consumers to discover new products, while saving time and money."

He said PayPal plans to optimize the commerce experience across channels and devices. 

The acquisition is scheduled to close in 2020. PayPal officials said the Honey acquisition will be accretive to its growth next year and it will update its earnings forecast. 

Cover image: PayPal.
 

About David Jones

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David Jones is the editor of Mobile Payments Today. He is a veteran business and technology journalist, with three decades of experience writing about business travel, real estate and technology.

Since 2015 he covered a range of technology stories for the ECT News Network, which includes the E-Commerce Times, TechNewsWorld, LinuxInsider and CRM Buyer, writing about cybersecurity, artificial intelligence, machine learning, open source computing and privacy issues among others. He recently covered FinTech issues for PYMNTS.com.

He worked as a staff writer for Bloomberg Business News and an online reporter for Crain’s New York Business. He has written for numerous media organizations, including Reuters, The New York Times, The Real Deal, Continental, City Limits and The Nation. 

He was previously awarded the George Washington Williams Fellowship for Journalists of Color by the Independent Press Association.