![]() Shopping assistants, like Shoptagr and Honey, create real value for the end-user. Rather than making paying for anything you buy online easier and more seamless they will be able to make shopping for anything you buy online easier and more seamless wish list management, coupons, cashback, loyalty programs, and payments all-in-one. On top of this increased visibility Honey will allow PayPal to provide the consumer with a more holistic and complete service. Access to this pre-purchase funnel means they could understand user intent in real-time and influence purchase behavior way before the payment page. They could have never known that en-route to that shopping moment, Dana considered 4 other products, 2 other brands of Bluetooth speakers, and eventually chose (the more expensive) JBL speaker on Target because they were the only ones committing to having it gift wrapped and shipped on her exact birthday. ![]() Until the Honey acquisition, PayPal would have had visibility into the last few moments of this purchase journey, right at the payment page. She would also choose to have it gift wrapped and shipped directly to her sister’s college dorm room. In the process, Dana would have visited 7 different retailers, browsed 4 different product categories, created a list of 11 different potential presents, and eventually decided to buy her sister a JBL Bluetooth Speaker for $105.99 from Target. Over the next few weeks, Dana will spend lots of time browsing, researching, comparing, and contemplating what she should buy her sister. Her sister's birthday is in six weeks from now but Dana has already begun scouring the market for ideas, and is asking herself: “What do I buy her this year? How much should I spend?” Dana is a 26-year-old living in New York City who wants to buy her sister a birthday gift. And yet, in today's sophisticated world of massive data-usage, this is still a very narrow view of the world. Overlay this data over many purchases of one or more buyers, alongside some demographic data, and PayPal has a treasure trove of data which has empowered it to become the amazing company that it is today. Now PayPal knows who the purchaser was, how much they paid, and when the purchase was made. ![]() The user completes the purchase and now PayPal has very specific visibility into the purchase behavior of that user. For instance, a user reaches the payment page of a product they want to buy and chooses PayPal as a payment option. PayPal acquired Honey because they and most other payment companies have a very narrow view of their customer’s world one that in many ways starts and finishes on the payment page of a product purchase funnel. Anything that can give these payment providers a competitive edge over their rivals will be strategic. And just like the telcos, the payment providers want a piece of the action that’s taking place on their infrastructure. That kind of makes the payment providers like telecom providers: dumb pipes over which transactions are made by other companies who gather and analyze the data of consumers. But they don’t actually own the customer data (information on what you’re buying, where, or what led you to buy it), just the financial transaction data. Payment providers like PayPal, Klarna, and even Visa, strive to make paying for anything you buy online easier and more seamless. Our thesis -that there is immense value for consumers, merchants, and payment providers in virtual shopping assistants- was proved correct by the sale of our largest competitor to the world’s leading payment company for an eye-popping 4 Billion. (Photo by Yichuan Cao/NurPhoto via Getty Images)īut for the team at Shoptagr, a Tel Aviv-based startup, the news brought vindication and even a sense of relief. PayPal has agreed to acquire Honey Science Corporation, a rapidly-growing technology platform for shopping and rewards, for approximately $4 billion. PayPal logo can be seen at its office in San Jose, California, United States on November 23, 2019. Why would PayPal pay such a large amount to acquire what is essentially a coupon app with a wish list feature? And even more puzzling, it’s an app that operates overwhelmingly in the Chrome App Store, not exactly considered the most relevant platform. When payments giant PayPal acquired Honey for $4,000,000,000 in late November, many people raised their eyebrows. For PayPal, Honey Makes The World Go Roundįull disclosure: I am an investor in and Board of Directors Member of Shoptagr, a company that makes a smart virtual shopping assistant, and which is a competitor of Honey Science Corporation.
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