PayPal has agreed to buy online shopping platform Honey for $4bn, the largest acquisition in the payments firm’s history.
The Los Angeles-based shopping app scans deals with the 30,000 online retailers it has agreements with to find savings for its 17 million active monthly users. It claims it saved its customers $1bn last year.
PayPal said the purchase will allow Honey access to its own 275 million consumer and 24 million business accounts.
The deal further diversifies PayPal from its core payments business in order to compete with Big Tech giants such as Amazon and Google, as it searches for new ways to establish closer ties with traders and consumers.
PayPal chief executive Dan Schulman (pictured) said: “Honey is among 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.”
He added: “As a partner of choice for our merchants, this is another way that we can help them build and strengthen their customer relationships, provide personalised offers, and drive incremental sales.”
Honey will retain its brand, its Los Angeles base, and will continue to be led by its two founders, George Ruan and Ryan Hudson. They will report to PayPal senior vice president John Kunze.
Honey’s Hudson said: “Combining PayPal’s assets and reach with our technology, we can build powerful new online shopping experiences for consumers and merchants.”
Palo Alto-based PayPal, founded in 1998, said it would pay for the acquisition out of its existing cash reserves, which stood at $5.5bn net of debt at the end of September.
In 2018, Paypal paid $2.2bn for card payment reader iZettle to boost its in-store presence following a split from eBay, the digital marketplace that made the payments firm a household name.