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PayPal sweet on Honey
Posted on Thursday, 21 November 2019 10:35
PayPal is carrying out its largest-ever acquisition by taking over Honey Science, a startup that finds and offers online shopping discounts and rewards, for USD 4.00 billion on a cash- and debt-free basis.

The US digital money transfer and payment processor is competing more and more with the likes of Apple and Google at the checkout, not to mention against big-hitting credit card networks such as Visa, which are also expanding their offerings.

PayPal’s acquisition will act as a springboard for growth in customer engagement – by reaching out to consumers at the beginning of their shopping journey and not at the end.

Founded in 2012, Honey is an aggregator of data on buying habits, and also tracks prices and issues coupons.

The Los Angeles-headquartered platform competes with other sites likes RetailMeNot but differentiates itself by automatically entering all eligible promotion codes for you during checkout and only applying the one with the largest discount.

It has about 17.00 million active users - based on October’s figures - and works across 30,000 online retailers ranging from fashion and technology to travel and pizza delivery.

Honey initially started out as a web browser but has grown and evolved to expand “its suite of products and services to include a mobile shopping assistant, offers and rewards program, and price-tracking tools and alerts”.

Key merchant partners include AliExpress, Etsy, Booking.com, Expedia and Walmart and, according to the statement, it was profitable on a net income basis in 2018.

Dan Schulman, president and chief executive of PayPal, said: "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."

Zephyr, the M&A database published by Bureau van Dijk, shows the deal is the seventh-largest acquisition of a company operating in the data processing, hosting and related services sector announced in 2019 to date.

© Zephus Ltd