Clipping coupons does pay off. On Thursday, PayPal announced it would spend approximately $4 billion in its largest acquisition ever to buy Honey, a free browser extension that helps people save money by finding deals and tracking prices. Honey had previously appeared on Forbes’ 2018 Next Billion-Dollar Startups list with an estimated $100 million in revenue for 2018. Honey was also profitable on a net-income basis in 2018, according to PayPal.
“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,” said Dan Schulman, president and CEO of PayPal in a statement.
Honey’s extension works by researching promo codes and coupons for popular retailers to make it easy for people to save money shopping online. It can compare prices on Amazon and also track price changes over time, so people can add items to their wish list and be notified when the price drops. More than 17 million people use the browser extension monthly, and it works with over 30,000 retailers, according to the news release.
Founded in 2012 by George Ruan and Ryan Hudson, the Los Angeles-based company has been largely been under the radar. It started with a browser extension and later expanded into price tracking and mobile. The company had previously raised $55 million in venture capital funding from investors like Citi Ventures and Anthos Capital.
PayPal stock fell 2% in after-hours trading following the announcement. Honey’s $4 billion acquisition is the largest in PayPal’s history. In May 2018, it bought Swedish fintech startup iZettle for $2.2 billion.
Source: Forbes
