Business

Why PayPal’s Acquisition of Rewards Platform Honey Is a Huge Deal

Why PayPal’s Acquisition of Rewards Platform Honey Is a Big Deal


Paypal’s obtained quite a bit occurring.

It has agreed to amass Honey,
a Los Angeles-based supplier of a deal-finding browser add-on and cell app,
for $four billion. That is PayPal’s largest acquisition up to now and the
largest acquisition of a tech firm in L.A. historical past.

Simply yesterday, we
published a Q&A with PayPal CEO Dan Schulman
who stated his resting coronary heart
price was a cool 48 beats per minute. Undecided I can say mine could be the identical
if I bought one thing for $four billion, however alas.

Right here’s why this deal is fascinating:

  • Large exit for small buyers: Honey had solely raised $49 million in enterprise funding. Meaning this exit will present a large windfall for its buyers. Santa Monica-based seed-stage agency Mucker Capital, for instance, is anticipated to obtain proceeds of $280 million from the $three million it invested in Honey, based on The Wall Avenue Journal. Different buyers embrace Citi Ventures, Anthos Capital, Bam Ventures, Plug and Play, Cendana Capital, Ludlow Ventures, and Surprise Ventures. Not precisely a star-studded roster of buyers you had been anticipating to see, proper? Surprise Ventures’ Dustin Rosen instructed the WSJ that a variety of outstanding VCs handed on the deal as a result of they didn’t perceive the worth of Honey’s information.
  • Honey is worthwhile!: Say what? Honey introduced in additional than $100 million in income final yr, and it was worthwhile on a web earnings foundation in 2018. 
  • Information is the whole lot: PayPal might be involved in Honey’s information on consumers and assist combine it with PayPal’s community of 24 million service provider accounts. “Combining PayPal’s belongings and attain with our know-how, we will construct highly effective new on-line buying experiences for shoppers and retailers,” stated Honey co-founder Ryan Hudson in an announcement. “We’ll have the power to assist thousands and thousands of outlets effectively attain shoppers with gives that ship increasingly worth to Honey members.”
  • Personalization is the longer term: PayPal’s retailers can have the power to focus on shoppers in a way more personalised and nuanced approach. Think about this for a second. PayPal purchased Venmo through its $800 million acquisition of Braintree in 2013. Subsequent yr, Venmo will roll out a bank card to its customers with an in-app expertise, a personal touch, and a mechanism for rewards. That is simply my hypothesis nevertheless it feels like PayPal, Honey, and Venmo will use their mixed information insights to create a hyper-personalized buying expertise for the consumer.

THE STATE OF EUROPEAN STARTUPS: Atomico, a
London-based enterprise capital agency, has a brand new report out that divulges some
fascinating insights within the European tech ecosystem. European startups have
raised $34.three billion, which is a document quantity of funding thus far this yr.
That is up from $25 billion the yr earlier than. That’s promising development, however 92%
of the funding went to all males groups, marking an analogous stage to 2018. 

Read the
full report here.

THIS JUST IN: Minute Media, an Israel-based digital
publishing platform, acquired Derek Jeter’s media enterprise The Gamers’ Tribune.
Monetary phrases weren’t disclosed. The corporate had raised roughly $58
million in enterprise funding from buyers together with GV, IVP, NEA, and Legendary
Leisure. Read
more.

Polina Marinova
Twitter: @polina_marinova
E mail: polina.marinova@fortune.com 





About the author

David Noman

David Noman

David enjoys writing about U.S. news, politics, and technology.
Email: noman@automotive27.com (For more details please visit our 'Team' page)

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