Today, PayPal announced that it's buying Honey, a popular shopping platform that makes it easier for users to get discounts and rewards when shopping online. The deal is expected to cost PayPal $4 billion, and it promises to provide to "transform the shopping experience" for PayPal users.
Chances are you've heard of Honey before. The company was founded in 2012, and it's been growing quickly, likely thanks to a great number of sponsorships in videos from many YouTube creators. While the browser extension has been around for quite some time, Honey was chosen as one of the few extensions that were built into Microsoft's Edge browser on mobile devices, alongside AdBlock Plus and NewsGuard. The service will chime in whenever it detects a potential discount on a product you're looking at, which has helped users save $1 billion when shopping online, according to PayPal's announcement.
PayPal says the acquisition supports the "shared vision" of both companies to make online shopping simpler and more personalized, increase customer engagements, and turn consumers into customers. Honey should be able to increase its audience by reaching PayPal's more than 275 million active consumer accounts and 24 million merchant accounts, potentially helping the platform get more exclusive deals. Meanwhile, Honey will help PayPal reach consumers before they've even made a purchase, and help merchants increase sales by delivering personalized and timely offers.
The acquisition deal is expected to be finished in the first quarter of next year, and it'll be reflected in PayPal's non-GAAP earnings per share in 2021.