PayPal Buys Shopping Site Honey
Popular discount shopping site Honey which is already profitable has been sold to Pay Pal for $5.8 Billion.
Popular in Australia PayPal Holdings said that Honey is its largest-ever acquisition with up to 17 million people using Honey apps or web browser extensions to find discounts at online shopping sites.
The start-up was profitable in 2018, PayPal said in a statement. Shares of the payments failed to move on the news.
According to Bloomberg Honey is valued at almost twice what PayPal paid for its next-largest deal, iZettle, the Swedish provider of small-business services it purchased in 2018 and marks the first major acquisition this year.
Chief Executive Officer Dan Schulman has signalled that PayPal, with more than $10 billion in cash, is on the hunt for more deals after a string of takeovers last year that included Hyperwallet and Simility.
Honey, which was founded in 2012, will keep its base in Los Angeles, and the founders will continue to run the business. The company’s services include a browser extension that automatically applies coupons at e-commerce sites. In a statement, PayPal said that Honey’s capabilities will give its customers a better shopping experience, and help merchants drive sales, partly with more timely and personalized offers.
Mark Palmer, an analyst at BTIG, said the acquisition would help PayPal make “significant advances” toward becoming more relevant to users. It could also give customers and merchants a reason to choose PayPal “in the face of increasing competition from tech companies, such as Facebook Pay.”