PayPal Just Made its Biggest Acquisition Yet

PayPal announced this week that it is buying Honey, a deal-finding service company for $4 billion.

The acquisition is PayPal’s biggest to date and even tops the $2.2 billion purchase of iZettle that the company made last year.

Honey, founded in 2012, is known for a tool that helps consumers find deals while shopping online. It works with 30,000 online retailers and according to the company, they have 17 million monthly users.

PayPal said Honey’s technology will help it reach consumers as they begin their “shopping journeys” with personalized offers.

Honey co-founder Ryan Hudson said the acquisition would give the company the ability to work with millions of retailers to reach its members and provide offers to consumers.

Hudson and co-founder George Ruan will still run the Honey team under PayPal’s global consumer product and technology group. The two will report to Senior Vice President John Kunze.

“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’s vision has always been to give consumers the tools they need to make the best decisions with their money,” said 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,” said Hudson. “We’ll have the ability to help millions of retailers efficiently reach consumers with offers that deliver more and more value to Honey members.”

The deal is expected to close in the first quarter of 2020.

Shares of PayPal were down 2% in after-hours trading on the announcement.

Disclaimer: We have no position in Paypal Holdings Inc. (NASDAQ: PYPL) and have not been compensated for this article.