PayPal has agreed to drop $US4 ($6) billion to take over Honey Science Corporation, the creator of browser shopping plugin Honey, TechCrunch reported on Thursday.
Honey alerts online shoppers to potential deals like coupon codes on products they are viewing, as well as offers comparative pricing, sales alerts and price history charts in the hopes of letting users know when they’re getting ripped off. It also has a rewards program, Honey Gold.
The eye-popping $US4 ($6) billion for a plugin, reportedly mostly in cash, makes a little more sense when considering that Honey claims to have 17 million monthly active users and the possibility of pushing its technology towards PayPal and its subsidiary Venmo’s 300 million users. Honey itself says its plugin functions on 30,000 e-commerce sites and told TechCrunch that it has saved those 17 million shoppers over 2 billion.
According to TechCrunch, PayPal could also use Honey’s data on shoppers to cut in on the deals game (as opposed to simply competing with other payment providers ranging from banks to Apple Pay) and help integrate it with what PayPal says is its network of 24 million users.
Honey is profitable and had revenue of north of $US100 ($147) million in 2018 on just $US32 ($47) million in funding, though the $US4 ($6) billion figure would still place it as one of the biggest tech acquisitions of 2019 in a market already flooded with sky-high valuations.
“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,” PayPal CEO Dan Schulman told TechCrunch in a statement. “… The combination of Honey and PayPal adds another significant and meaningful dimension to our two-sided platform.”
PayPal has been bullish lately, with Schulman pointing to better-than-expected Q3 2019 numbers and strong spending by its customers to downplay talk of a near-term recession.
While acknowledging that issues like Brexit, the U.S.-China trade war, and the ongoing impeachment proceedings against Donald Trump could “break any one of number of different ways,” CNBC reported, Schulman said in a recent interview that “From our perspective, we see a pretty strong secular growth. People have been predicting a recession for some time, but we’re not seeing it in any of our numbers.”
(According to the Wall Street Journal, almost 64 per cent of economists polled for its Economic Forecasting Survey expect a recession to strike by the end of 2021.)
In the past few weeks, PayPal has also been in the news for waging what amounts to open war on sex workers, refusing this month to process payments for an estimated 100,000+ models working through PornHub. In a statement to Motherboard, PayPal said that they had discovered the porn mega-site had “made certain business payments… without seeking our permission.”
PayPal also recently bailed on Facebook’s Libra cryptocurrency project amid intense backlash from global finance regulators and legislators concerned that allowing a Facebook-led consortium to set up a planet-spanning payments network could destabilise the world financial system.