PayPal is set to acquire Honey, a shopping rewards platform for approximately $4 billion. Honey works with 30,000 online retailers and has an average of 17 million monthly active users.
PayPal made the acquisition to transform the shopping experience for PayPal’s consumers while increasing sales and customer engagement for its merchants. According to the statement, ‘Honey has helped millions of people find more than $1 billion in savings in the past year’.
The acquisition also aims to unify both PayPal’s and Honey’s mission to simplify and personalise the shopping experience for consumers while driving conversion and increasing consumer engagement and sales for merchants. Honey will accelerate its growth by driving adoption among PayPal and Venmo’s more than 275 million active consumer accounts and sourcing exclusive offers from PayPal’s extensive network of 24 million merchant accounts.
“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. “The combination of Honey’s complementary consumer products with our platform will significantly enhance our ability to drive engagement and play a more meaningful role in the daily lives of our consumers. As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalized offers, and drive incremental sales. The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform.”
Honey will remain at its headquarters in Los Angeles, and its co-founders George Ruan and Ryan Hudson will continue to lead the Honey team. They will work as part of PayPal’s global consumer product and technology organisation and report to Senior Vice President John Kunze.
“Honey’s vision has always been to give consumers the tools they need to make the best decisions with their money,” explained George Ruan. “PayPal shares that vision and together we can build powerful commerce capabilities that create real value for both consumers and retailers around the world.”
“Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants,” Ryan Hudson said. We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”
According to the statement, Honey was profitable on a net income basis in 2018. ‘Subject to customary closing conditions, including the receipt of regulatory approvals, the transaction is expected to close in the first quarter of 2020’. The acquisition is expected to be increased to PayPal’s non-GAAP earnings per share in 2021.
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