PayPal to acquire shopping and rewards platform Honey for $4 Billion

guest · Nov 20, 2019

PayPal to acquire shopping and rewards platform Honey for $4B
November 20, 2019
https://techcrunch.com/2019/11/20/p...ing-and-rewards-platform-honey-for-4-billion/

PayPal announced today it has agreed to acquire Honey Science Corporation, the makers of a deal-finding browser add-on and mobile application, for $4 billion, mostly cash. The acquisition, which is PayPal’s largest to date, will give the payments giant a foothold earlier in the customer’s shopping journey.

Currently, Honey’s 17 million monthly active users take advantage of its suite of money-saving tools to track prices, get alerts, make lists, browse offers and participate in an Ebates-like rewards program called Honey Gold. Its users tend to be younger, millennial shoppers, both male and female.
PayPal aims to add Honey’s technology to its own product line, expanding its reach to PayPal’s 300 million users.

In addition, PayPal’s network of 24 million merchant partners will gain the ability to offer targeted and more personalized promotions to consumers as a means of acquiring new business and driving increased sales.
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Rasheed187 · Nov 23, 2019

This is crazy, has PayPal lost its mind? Why the hell would you pay 4 billion for a company with only 100 million dollar of revenue? The funny thing is, this year I saw a similar tool called Pouch being presented on BBC's Dragons Den, I wonder what these guys are thinking right now.

https://joinpouch.com

guest · Nov 23, 2019

Why Did PayPal Pay $4 Billion for a Coupon Browser Extension?
November 22, 2019
https://www.wired.com/story/paypal-honey-4-billion-dollars/

If it goes through, it will be the largest tech deal in the city’s history, and PayPal’s biggest acquisition ever. Why would any company shell out that much for a shopping tool?

PayPal revolutionized online shopping with its payments system two decades ago, but lately more tech companies have been encroaching on its turf.
Google, Apple, Amazon, Facebook, and other tech giants are getting into financial services as their next big venture. If shoppers start preferring those options when it comes time to pay, PayPal might be in trouble.
Just like Rakuten, Honey makes money by charging retailers a small percentage of sales made with the coupons it finds. But why would stores pay to let consumers buy their stuff for less?

Is that worth $4 billion though? “I’m scratching my head,” says Sucharita Kodali, an ecommerce and retail analyst at the market research firm Forrester. "I don’t know what [PayPal] sees."
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Kodali says one compelling aspect of Honey is its mobile app, where consumers can add items from different retailers to their cart and pay for them all at once. “That has been something that nobody in retail has solved,” she says. “That’s the only thing that I could imagine could take on a $4 billion evaluation.”

Instead of shopping on Amazon, you can use Honey to buy from all your favorite stores at the same time, and automatically apply any available coupons. It’s a valuable service that could help differentiate PayPal from everyone else.
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guest · Nov 26, 2019

How the PayPal Honey deal could reshape ecommerce
November 26, 2019
https://venturebeat.com/2019/11/26/how-the-paypal-honey-deal-could-reshape-ecommerce/

Analytically speaking, it’s a magical move. In fact, it’s probably one of the best deals either could have made, and there was no better buyer or acquirer for Honey than PayPal, which brings its own 24 million merchants and 275 million users to the deal.
It’s all about the customer journey
The holy trinity in the customer journey are identity, behavior, and intent.
It starts with the data. Until now, PayPal has one of the best data sets of customer identity, but it only had data at the end of a customer’s journey online.

Essentially, PayPal had the identity (it knows who you are), and it had the behavior (it knows your behavior when you make a purchase). Now, with intent data, it can also predict what’s likely to come next.PayPal now has a powerful two-sided platform for customer engagement, like Amazon or Facebook, that takes the company beyond the transactional relationship to get the best deals for its customers and engage with them.
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Finally, PayPal could offer location-based merchant recommendations or advertising coupons on deals based on customer relevancy, which could lead to ad revenue from merchants
PayPal can also now connect intent data to abandoned shopping cart situations, effectively creating the mother of all cart-abandonment tools.
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zapjb · Nov 26, 2019

Yeah but $4B. I could see up to $2B based on 20x annual income as stated above. But once PP gets rolling & pushing Honey to their customers PP could easily triple Honey's annual income. Or PP could **** it up. My guess is they double Honey's annual income within 3 years.

Rasheed187 · Dec 1, 2019

zapjb said: ↑

Yeah but $4B. I could see up to $2B based on 20x annual income as stated above. But once PP gets rolling & pushing Honey to their customers PP could easily triple Honey's annual income. Or PP could **** it up. My guess is they double Honey's annual income within 3 years.
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Let's say face it, it's a ridiculous deal. Honey simply isn't worth 4 billion, not even close. I won't be buying any PayPal stock anytime soon, the management has lost it, this deal is a bad sign for investors.

guest · Jan 10, 2020

Amazon Takes a Swipe at PayPal's $4 Billion Acquisition
The retail giant warned holiday shoppers that Honey, a popular browser extension, was a “security risk.”
January 9, 2020
https://www.wired.com/story/amazon-honey-security-warning/

Days before Christmas, at the height of the last-minute holiday shopping rush, an ominous message appeared on Amazon.com. It warned shoppers who used a popular browser extension called Honey that the service, which promises to track prices and discount codes, was “a security risk.”

“Honey tracks your private shopping behavior, collects data like your order history and items saved, and can read or change any of your data on any website you visit,” the message read. “To keep your data private and secure, uninstall this extension immediately.”
https://twitter.com/ryanhutchins/status/1208134077917913088
Amazon declined to explain why it decided to label Honey a security risk so suddenly last month.
They declined to answer follow-up questions about the basis for that claim.

“[...] Our extension is not—and has never been—a security risk and is safe to use,” a Honey spokesperson said.
There’s still the possibility that Amazon found a legitimate security problem with Honey, but it won’t say what.
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TheVerge: Amazon suspiciously says browser extension Honey is a security risk, now that PayPal owns it

The timing is suspect, and Honey is pushing back
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Rasheed187 · Jan 11, 2020

mood said: ↑

Amazon Takes a Swipe at PayPal's $4 Billion Acquisition
The retail giant warned holiday shoppers that Honey, a popular browser extension, was a “security risk.”
January 9, 2020
https://www.wired.com/story/amazon-honey-security-warning/

TheVerge: Amazon suspiciously says browser extension Honey is a security risk, now that PayPal owns it
Click to expand...

LOL, this is a low blow from Amazon.

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