13 ms·

$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

$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 ago
To put it in perspective: WhatsApp: $55/user Instagram: $20/user
- eaenki 7y ago
  Given 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 ago
    You’re saying Honey is worth $20B?
    - namibj 7y ago
      Pretty sure parent means the other direction.
    - jacurtis 7y ago
      He 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 ago
  Skype : $240/user Broadcast.com: $10,000/user
mrfusion 7y ago
Couldn’t you basically start any website and pay users $200 and get as many users as you want?
- swampthinker 7y ago
  Except you also need to get money from those users on a recurring basis.
- smt88 7y ago
  Yes, but when potential investors or acquirers were doing their diligence, they'd find out that your cost of user acquisition was extremely high. It's likely Honey did have a high cost of acquisition, but nowhere in the ballpark of $200/user.
- gravypod 7y ago
  That's something PayPal did initially.
- baddox 7y ago
  In order to do that and get PayPal to acquire you for at least that much money, you'd have to convince PayPal that your users also spend money that makes it back to you. Honey's pitch probably wasn't just "we have x daily active users," but rather something like "we have x daily active users who are big e-commerce spenders, and we can make money by connecting our users with retailers."
- thesausageking 7y ago
  That's literally what PayPal did. They gave users $20 if you created an account. Over time, they lowered it to $10 and then $5. The program cost them ~$70m, but let them grow at 7-10% / day. They went from 800k accounts in March of 2000 to 4m in September, and then 11m in September of 2001.
  - gonesilent 7y ago
    Also jet.com subsidizing sales.
  - 7y ago
etxm 7y ago
Yeah that was the first thing I calculated when I read that. That’s pretty nuts. Having an installed use base helps. They’ll continue to make cash off a large portion of checkouts.

sdinsn 7y ago

To put it in perspective: WhatsApp: $55/user Instagram: $20/user

eaenki 7y ago
Given 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 ago
  You’re saying Honey is worth $20B?
  - namibj 7y ago
    Pretty sure parent means the other direction.
  - jacurtis 7y ago
    He 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 ago
Skype : $240/user Broadcast.com: $10,000/user

mrfusion 7y ago

Couldn’t you basically start any website and pay users $200 and get as many users as you want?

swampthinker 7y ago
Except you also need to get money from those users on a recurring basis.
smt88 7y ago
Yes, but when potential investors or acquirers were doing their diligence, they'd find out that your cost of user acquisition was extremely high. It's likely Honey did have a high cost of acquisition, but nowhere in the ballpark of $200/user.
gravypod 7y ago
That's something PayPal did initially.
baddox 7y ago
In order to do that and get PayPal to acquire you for at least that much money, you'd have to convince PayPal that your users also spend money that makes it back to you. Honey's pitch probably wasn't just "we have x daily active users," but rather something like "we have x daily active users who are big e-commerce spenders, and we can make money by connecting our users with retailers."
thesausageking 7y ago
That's literally what PayPal did. They gave users $20 if you created an account. Over time, they lowered it to $10 and then $5. The program cost them ~$70m, but let them grow at 7-10% / day. They went from 800k accounts in March of 2000 to 4m in September, and then 11m in September of 2001.
- gonesilent 7y ago
  Also jet.com subsidizing sales.
- 7y ago

etxm 7y ago

Yeah that was the first thing I calculated when I read that. That’s pretty nuts. Having an installed use base helps. They’ll continue to make cash off a large portion of checkouts.