33 ms·
PayPal to acquire shopping and rewards platform Honey for $4B
- chanchar 7y agoCan someone with a better understanding of Honey's business explain why it's worth $4B?
- twostorytower 7y agoOver 300 employees AND profitable. How many other startups have achieved that?
- Bootwizard 7y agoSure but HOW does it make money?
- twostorytower 7y agoI believe they’re an affiliate of many of the popular shopping sites. So they get a cut of any sales they help drive.
- gonesilent 7y agoNope, it got kicked out of most of them. It makes money by retailers paying them to push deals.
- pcurve 7y ago$100mil+ in revenue. 60-70% probably goes to 300 people payroll. I guess projected numbers are amazing.
- gonesilent 7y agoAnd the rest +vc money on ad's and paid installs. What the heck did PayPal buy?
- deleted 7y ago[deleted]
- undefined3840 7y agoThat might be one of the best exits you could hope for as a founder or startup employee. Very little money raised to get to that valuation.
- sarcasmatwork 7y agoI'm more amazed people still use Paypal in today's society.
- windsurfer 7y agoIt's often the only choice.
- hello_1234 7y agoVenmo, owned by paypal, is very popular in the US. People use to split expenses among friends.
- kevindong 7y agoImportantly however, Venmo doesn't make money on peer to peer transactions that use bank accounts, which I'd imagine is what most people do as that's free. Consequently, Venmo is not profitable. https://www.cnbc.com/2019/04/24/venmo-has-40-million-users-paypal-reveals-for-first-time.html#:~:targetText=Venmo%20is%20on%20pace%20to,Cash%20App%20as%20of%20December https://www.cnbc.com/2019/04/24/venmo-has-40-million-users-p....
- lccarrasco 7y agoVenmo transactions' data and the social network inferences you can make from them are probably pretty valuable on their own.
- kevindong 7y agoBut Venmo/PayPal don't have any ads? Furthermore, just because you can link people together, it doesn't mean that knowledge is actually valuable. The only social network you can link to Venmo currently is Facebook. The only other way to "discover" contacts/friends is by uploading your contact book to Venmo's servers.
- idunno246 7y agoI don’t see how that data is all that valuable. There’s the inherent network effect of needing to install it to send/receive money from a friend who did. But a surprising number of people will pay for instant transfer(almost all of that 300m probably comes from this), and the debit cards they get to take in a portion of the merchant transaction fees. They’ll probably be profitable off that, with p2p as a loss leader to drive installs
- hello_1234 7y agoHoney sponsors a lot of youtube personalities. I remember Mr Beast talking about them. Seems like it paid off.
- bballer 7y agoYeah they sponsored a ton of Yes Theory videos as well. It always felt a tad off, but you're right, it worked.
- empyrical 7y agoThey even went beyond sponsoring YouTubers, and hired a few (like LinusTechTips) to star in ads https://www.youtube.com/watch?v=dOVe0ysXRjM https://www.youtube.com/watch?v=dOVe0ysXRjM
- devicetray0 7y agoPertinent data points from the article: > $4 billion, mostly cash > 17 million monthly active users > 350 employees > profitable on a net income basis, 2018 > raised $49 million from investors
- foobaw 7y agoHow rich will this make Honey employees? Especially the early ones?
- airstrike 7y agoVery rich
- whalesalad 7y agoA tenth of one percent of that acqusition amount is ~4 million.
- twostorytower 7y agoThe co-founders will be billionaires. Early employees will be millionaires. The earliest probably high 8 figures.
- deleted 7y ago[deleted]
- darianlamberto 7y agorich enough not to use coupons anymore
- danShumway 7y agoHow does Honey make money, aside from the obvious data collection? I know a few people who use it, and I've cautioned them in the past that I can't think of any savory business model that would make this profitable. Is there one? Is it just tracking purchases for advertisers, or is there some other monetization strategy I'm missing? Their main site says they make commissions, but I don't know how to square that with the way consumers use it -- which is to find coupons from other sites. Honey isn't like a credit card, is it? If I'm a retailer, I don't know why I'd pay a company money for them to scrape coupons from other sites -- and it's not like Honey is going to stop scraping coupons for my products if I don't pay them money, right?
- kart23 7y agoI think honey by itself probably doesn't make much if anything. Integrated with PayPal however has the potential to become a big earner in terms of fees and new customers.
- deleted 7y ago[deleted]
- undefined3840 7y agoGenerally these coupon sites all make money the exact same way - through affiliate programs that pay them some % of the purchase price for referring a customer to their site. Honey shares the savings with the customer.
- delusional 7y agoSupposedly they make money from referrals, so if you buy something from Amazon, they load in their referral link. From what I've heard they don't actually sell purchase data. I don't know for sure though. I don't understand how referrals are worth 4b though.
- bradlys 7y agoI don't think Amazon works with them anymore for referrals? Other websites might though. Rakuten/ebates works the same way. You go to a website, turn on the referral program, and then the plugin will send you a physical check in the mail once you hit a minimum amount (and it will be at most quarterly). If you have customers spend $1B+ quarterly using these plugins and you get maybe 1% cut then you're getting $10m cash/yr plus all kinds of browsing data to sell analytics on.
- kevindong 7y ago$4 billion acquisition price / 17 million monthly active users [0] = $235.29 per active monthly user [0]: https://investor.paypal-corp.com/node/10556/pdf https://investor.paypal-corp.com/node/10556/pdf
- sdinsn 7y agoTo put it in perspective: WhatsApp: $55/user Instagram: $20/user
- eaenki 7y agoGiven the timing, network effects, potential, address book data and $0 CAC, they were stealings and I can’t believe Honey sold for $4B. Sounds off by x5+
- josephjrobison 7y agoYou’re saying Honey is worth $20B?
- namibj 7y agoPretty sure parent means the other direction.
- jacurtis 7y agoHe is saying it is 5x too high. So the valuation should be 1/5th (20%). So he is suggesting a valuation of $800,000,000 ($800M). Which in my opionion is about right. That puts the value per user right at $47 per user. Again, which given PayPal's previous acquisitions, looks accurate.
- rasz 7y agoSkype : $240/user Broadcast.com: $10,000/user
- mrfusion 7y agoCouldn’t you basically start any website and pay users $200 and get as many users as you want?
- graphememes 7y agoI thought honey was a pure scam, it's not?
- crankylinuxuser 7y agoI was in the same boat. The few ads that got past my adblocker indicated the site was borderline porn-scammy. I stayed as far as I could away. They feel similar as "Wish". Just as terrible. Don't trust them.
- WrtCdEvrydy 7y agoThey take referral links when you go to Amazon and in exchange they just try multiple coupon codes.
- strbean 7y agoThey are EBates, without the cash back. They just auto-plug coupons into coupon code forms and take the referral money.
- deleted 7y ago[deleted]
- viraptor 7y agoTechnically without the cashback. In practice you still connect honey gold which converts into vouchers, so it's really like 1-2% cashback.
- strbean 7y agoInteresting, didn't know about that aspect of Honey! tbh, my experience with EBates (and promo codes in general) is that retailers hardly run promo codes anymore. It seems most codes now are individualized, probably as a reaction to the adoption of tools like these.
- maerF0x0 7y agoCamelCamelCamel had no idea what it was worth, Retailmenot missed the boat, wikibuy can now market itself for 4B to Square or something.
- durbin 7y agoWikibuy was already acquired by Capital One.
- maerF0x0 7y agoyou're right! I never realized https://www.capitalone.com/tech/software-engineering/saving-money-online-is-easy-and-fast-with-wikibuy-from-capital-one/ https://www.capitalone.com/tech/software-engineering/saving-...
- Hydraulix989 7y agoWhat about Wikibuy is a wiki?
- deleted 7y ago[deleted]
- joncrane 7y agoWiki means fast in Hawaiian. It came to be synonymous with online community editable websites for information. But it's original meaning is from the Hawaiian phrase "wiki wiki" which means quickly. So it makes sense. Quickbuy.
- appleflaxen 7y agothat's the origin, but not exactly what the contemporary computer meaning is (which is more like "crowd-sourced")
- liveoneggs 7y agowikipedia has tons of goodwill so calling yourself "wiki"-something is excellent free marketing
- eaenki 7y agoEven if the data is highly valuable and it’s not losing money, I don’t see how it’s worth $4B with 17M users. Sounds off by like x5
- hnburnsy 7y agoIf you use Edge on Android, Honey is a built in extension, but not enabled. Go to settings then coupons to see it lurking there. Thought it was weird that Microsoft would partner with such a weird company. Having a deal with Microsoft may have given them Street cred.
- gonesilent 7y agoLooks like pay to play worked for them.
- myskier 7y agoHoney permissions in Safari Browser: 1. Can see all webpages in browsing history 2. Can read sensitive information from webpages, including passwords, phone numbers, and credit cards on all webpages
- saagarjha 7y agoThat’s the standard warning for extensions that inject their scripts on every page.
- dboreham 7y agoA new high water mark in "they paid $x for a company I never heard of?!?"
- wp381640 7y agoI pulled the Honey extension a while ago to poke through it in order to better understand it and the first interesting thing I found is that despite the Google order that they'll no longer allow obfuscated Chrome extensions[0] the Honey extension is still - a year later - a large 2MB+ Javascript blob (webpack compiled and minified) [1] I've been meaning to go back into it to figure out what exactly they're doing but never found the time $4B cash on an extension that is at the mercy of Google and it's ever-changing rules and sporadic enforcement seems a risk [0] https://blog.chromium.org/2018/10/trustworthy-chrome-extensions-by-default.html https://blog.chromium.org/2018/10/trustworthy-chrome-extensi... [1] https://robwu.nl/crxviewer/?crx=https%3A%2F%2Fchrome.google.com%2Fwebstore%2Fdetail%2Fhoney%2Fbmnlcjabgnpnenekpadlanbbkooimhnj%2Frelated https://robwu.nl/crxviewer/?crx=https%3A%2F%2Fchrome.google....
- lacker 7y agoAFAICT, Google allows minified extensions, just not obfuscated ones. A quick browse through the Honey source code suggests to me that they are appropriately minifying and not obfuscating, because many of their variable names are comprehensible.
- seanwilson 7y ago> appropriately minifying and not obfuscating, because many of their variable names are comprehensible Wouldn't most scripts run through a minifier have incomprehensible names?
- meowface 7y agoYes, if set to maximum minimization. They might retain the original names to help with debugging, possibly.
- seanwilson 7y agoChrome extensions allow minimisation, including destroying the original names. I'm curious how they review the extensions to be honest as they don't ask you to provide the source code or the source map.
- n8henry 7y agoOne of their early employees did an "Ask Me Anything" on Reddit about 5 years ago. It is pretty interesting. https://www.reddit.com/r/IAmA/comments/1vjj51/i_am_one_of_the_developers_of_a_popular_chrome/ https://www.reddit.com/r/IAmA/comments/1vjj51/i_am_one_of_th...
- yellow_lead 7y ago> data collection companies that have tried to buy user data > We turned them all down. Guess that didn't last long.
- celim307 7y agoI mean, whenever a company says they dont sell user data, they just mean they haven't found a price they like yet
- darianlamberto 7y agoit wasn't an employee, it was a founder doing a calculated marketing campaign that they bragged about in a seed funding deck which i wish i had bought into at the time..
- deleted 7y ago[deleted]
- willart4food 7y ago$235 per active user, and a mostly cash deal. That sounds like one of those dot-com's deals.
- shamblesRed 7y agoFeel like a lot of people don't understand what business Honey is in. And a lot of the times they're not even familiar with the whole lineup of Honey products. Knowing someone's intent to purchase is very powerful. You're literally giving information about what you want to buy, what price you might buy at etc. Plus deals, coupons, price drops etc make manipulation really easy. $4B might be a bit too much but still, this adds a lot of value to Venmo. I'd say it was a good buy! But yeah people calling it a scam etc. are unaware of the company. Maybe because they weren't as publicized as Bay Area companies or didn't raise too much money
- jbob2000 7y agoYou don't understand how fickle technology is and how fickle users are. It's a browser plugin, it takes 2 seconds to uninstall. This entire company could disappear in a flash if something about the plugin ecosystem changes, or if e-commerce habits change to be more mobile oriented. They have absolutely 0 stickiness. Most of their users probably installed the plugin during their initial marketing push and have forgotten to turn it off.
- deleted 7y ago[deleted]
- dyeje 7y agoHow is Honey worth even remotely close to 4B. It is a coupon aggregator in a browser extension?
- netsharc 7y agoFor one thing, userbase (see other replies), for another, there's too much cash floating around looking for good ROI, thanks to governmental policies.
- yellow_lead 7y agoI know it's apples and oranges, but when I compare this to the Instagram acquisition (1B) in my head, I'm truly stunned.
- tr33house 7y agoA lot of people agree that Instagram was sorely underpriced and was a steal for fb
- will_pseudonym 7y ago> $235 per active monthly user I, for one, laud PayPal's bold move to acquire such a large future tax write-off.
- durbin 7y agoReading these comments has actually made everyone in the room less intelligent.
- durbin 7y agoYou may downvote me all you wish, I stick by my comment. haha. These are really bad takes.
- chirau 7y agoIn what world is Honey worth 4b?
- yjhoney 7y agoWinnie the Pooh
- rgbimbochamp 7y agoIsn't this just a chrome extension that shows up in ads everywhere?
- xfitm3 7y agoOne scummy company acquiring another.
- datavirtue 7y agoThe rampant consolidation continues....
- ChaitanyaSai 7y agoWe worked on an open-source price comparison for a while https://github.com/OpsopiDev/extpricext https://github.com/OpsopiDev/extpricext You might find this useful: if you are worried about what's happening with your data with an alternative like Honey, or you actually want to compare prices while shopping on Amazon (which clamps down on anyone trying to offer price comparison or price history graphs) Please note that this is quite rough, and can do with a number of feature improvements (we haven't had the time to get back to it)
- nerdkid93 7y agoyou can get price history graphs from CamelCamelCamel for Amazon products
- syshum 7y agoSo will they now ban people from using Coupon's based on their political beliefs too?
- yalogin 7y agoHoney is very similar to the ad programs we had during the early 2000s. People used to get paid for clicking on ads. Now the same idea is repackaged and used to gather browsing data and it’s worth 4billion? Why don’t companies look at the downside before buying these? One single privacy issue will kill the whole product. This is like buying a new car, PayPal already has Lot less than 4billion in its hands.
- giarc 7y agoWhen I was a young teenager, I remember using one called AllAdvantage (IIRC). I believe you earned money by simply having the extension open while you browsed. Cash out minimum was supposed to be $20, but once I hit that mark, the minimum all of sudden changed. I never got my money.
- asar 7y agoAs others have mentioned, at first sight, this seems like a crazy valuation at $235.29 per monthly active user. But customer acquisition costs for financial products can be a lot higher than that. Honey is close to the payment process, this must be very valuable to PayPal, maybe because it gives them a clear advantage over other PSPs or because they can offer merchants another way to increase revenues and customer satisfaction. The tech might also provide an easier way to enter new markets since it would distinguish PayPal from other payment providers, i.e., entering a new market as the payment provider that's secure and lets you save money.
- nellyb84 7y agothere's an amazon app extension that does something super similar to this. "Amazon Assistant" - https://www.amazon.com/gp/BIT https://www.amazon.com/gp/BIT
- deleted 7y ago[deleted]