Did PayPal buy Honey? Why Did PayPal Acquire Honey?

Did PayPal buy Honey? Why Did PayPal Acquire Honey? “We’re thrilled to complete this transformative transaction and to welcome the Honey team to the PayPal family,” said Dan Schulman, president and CEO of PayPal. “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.”

Honey Co-founders George Ruan and Ryan Hudson will continue to lead the Honey team as part of PayPal’s global consumer product and technology organization, reporting to Senior Vice President John Kunze.

Did PayPal buy Honey?

Honey: we’ve seen their ads everywhere – running at the start of YouTube videos and plastered on the walls of big city metros. The company, which was recently acquired by PayPal for $4 billion, is very well known for their web browser extension. The add-on, which is completely free to download and use, scans for potential coupon codes to use while online shopping and will automatically apply the best discount if it finds one. It’s a win-win for shoppers and Honey, because users save money and Honey grows their user base.

And, when members use Honey to buy from merchant partners of the company, Honey gets a commission from that sale. That’s how they were able to generate an impressive $250 to $300 million of expected revenue in 2019. What’s even more inspiring is the origin of the company.

READ  What is PayPal Pay later? How does PayPal Pay in 4 work?

Founded in 2012, Ryan Hudson had the idea for Honey after wanting to find a way to get his kids cheaper pizza. That night, he designed the browser extension, and with the help of his partner George Ruan, the extension now has over 5 million downloads and has saved its users hundreds of millions of dollars.

PayPal buy Honey

Why Did PayPal Acquire Honey?

Part of the reason PayPal was so eager to acquire Honey was because of the large base of over 17 million monthly active users that the company has been able to attract. More importantly, Honey has also shown a strong track record of growth, and their mission matches closely with PayPal’s. Both businesses seek to improve their users’ quality of life by providing helpful services.

At the end of the day, their products are a financial win-win for both the companies and the consumers. Citi Ventures, which valued Honey in 2018, priced it at $700 million. Surely, the value of the company has risen since then, but most analysts would disagree with a $4 billion valuation.

So why was PayPal willing to shell out so much money, making it their largest acquisition to date? The high purchase premium comes down to the fact that PayPal saw many valuable synergies between themselves and Honey, that they believed would still make the deal profitable for them even with such a high price tag. For example, Honey will now be pushed to PayPal and Venmo’s 275 million users. Additionally, Honey will source exclusive offers from PayPal’s 24 million merchants.

The Market’s Reaction to the Acquisition

Following the news that PayPal intended to acquire Honey, which was announced on November 20th 2019, the stock took a small downturn. PayPal Holdings (NASDAQ: PYPL) dropped almost 5% within the next two days. However, the stock has performed strongly since then, rising more than 16%.

READ  Does PayPal work internationally? How Do I Avoid PayPal Fees

This may reflect the initial drawback investors had towards the high price tag of $4 billion, and then the gradual realization of the value that Honey would provide once integrated into the PayPal network. Time will tell if the acquisition will be enough to push the stock over its previous all-time high of $121.48, but the future of PayPal and its holdings is looking promising.

PayPal buy Honey

What Does the Future of Honey Look Like?

For the users of Honey, your experience should remain very similar. The company is not changing its brand or logo or website. The significant changes will be taking place behind the scenes, in the number of people working for the company, their offices, the resources they have available, etc.

As mentioned before, PayPal will be integrating Honey into their other services and pushing it to those users. Honey has already shown itself to be a major player in the online shopping sector but expect it to continue growing and reach new heights with the resources and integration with PayPal. This means big things for the future of Honey, ecommerce, and your savings!

Romero Mentoring’s Analyst Prep Program

In just 15-weeks, you can become a world-class finance professional. The Romero Mentoring Analyst Prep Program is an all-inclusive internship, mentorship, and training experience like no other. Learn the in-depth principles of finance and apply what you learn through an extensive internship led by a finance professional with over 12 years of experience. Learn more here.

The Analyst Prep Program teaches the technical and practical skills that investment banks, hedge funds, and private equity & consulting firms look for in a candidate. Students begin with little to no technical skills and develop into fully prepared professionals who can perform as first-year analysts from day one.

READ  Can I Transfer money from Venmo to PayPal? What Is PayPal?

PayPal Finalizes $4B Honey Acquisition

PayPal has completed a $4 billion deal — its largest to date — to acquire the shopping rewards platform Honey Science Corporation, PayPal announced Monday (Jan. 6).

With Honey, PayPal is striving to revamp the shopping journey for its customers while upping eCommerce sales and shopper engagement for its merchants.

Founded in 2012, Honey has grown from an eCommerce price-tracking tool to an expanded suite of services that include a shopping assistant and rewards program. With roughly 17 million active users each month and 30,000 diverse online retailers, Honey has delivered some $1 billion in savings to shoppers in the past year.

“We’re thrilled to complete this transformative transaction and to welcome the Honey team to the PayPal family,” said Dan Schulman, president and CEO of PayPal, in the announcement. “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.”

Honey will remain at its Los Angeles, California, headquarters, along with co-founders George Ruan and Ryan Hudson, both of whom will report directly to Senior Vice President John Kunze as they continue to head the Honey division.

“Honey’s vision has always been to give consumers the tools they need to make the best decisions with their money,” said Ruan in November when the acquisition was announced. “PayPal shares that vision, and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”

PayPal buy Honey

Above is information about Did PayPal buy Honey? Why Did PayPal Acquire Honey? that we have compiled. Hopefully, through the above content, you have a more detailed understanding of PayPal buy Honey. Thank you for reading our post.

Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *