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| | industry = ], ] | | industry = ], ] | ||
| | founded = {{start date|2012|10}} | | founded = {{start date|2012|10}} | ||
| | founders = George Ruan<ref name="BloombergQuint">{{Cite web |
| founders = George Ruan<ref name="BloombergQuint">{{Cite web|last1=Metcalf|first1=Tom|last2=Verhage|first2=Julie|url=https://www.bloombergquint.com/onweb/coupon-duo-now-worth-1-5-billion-after-honey-s-sale-to-paypal|title=Coupon Duo Now Worth $1.5 Billion After Honey's Sale to PayPal|website=]|language=en|date=January 28, 2020|access-date=January 28, 2020|archive-url=https://web.archive.org/web/20201209044201/https://www.bloombergquint.com/onweb/coupon-duo-now-worth-1-5-billion-after-honey-s-sale-to-paypal|archive-date=December 9, 2020|url-status=dead}}</ref><br>Ryan Hudson<ref name="BloombergQuint" /> | ||
| <br>Brian Silverstein<ref name="EquityNet">({URL="https://www.equitynet.com/c/honey-science"})</ref> | <br>Brian Silverstein<ref name="EquityNet"> ({URL="https://www.equitynet.com/c/honey-science"})</ref> | ||
| | parent = ]<ref name="BloombergQuint" /> | | parent = ]<ref name="BloombergQuint" /> | ||
| | location = ], ], ]<ref>{{Cite web |
| location = ], ], ]<ref>{{Cite web|url=https://www.latimes.com/business/la-fi-honey-lease-20180801-story.html|title=Online coupon firm Honey taking over historic Coca-Cola plant in Arts District|last=Vincent|first=Roger|website=]|date=August 1, 2018|access-date=January 3, 2019}}</ref> | ||
| | area_served = ], ] | | area_served = ], ] | ||
| | key_people = George Ruan<br>{{small|(CEO)}}<br>Ryan Hudson<br> | | key_people = George Ruan<br>{{small|(CEO)}}<br>Ryan Hudson<br> | ||
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| ==History== | ==History== | ||
| Entrepreneurs Ryan Hudson and George Ruan founded Honey<ref name="BloombergQuint" /> in November 2012 in Los Angeles, California, after building a ] of the browser extension in late October 2012. A bug tester leaked the tool to ], where it went viral.<ref>{{Cite web |
Entrepreneurs Ryan Hudson and George Ruan founded Honey<ref name="BloombergQuint" /> in November 2012 in Los Angeles, California, after building a ] of the browser extension in late October 2012. A bug tester leaked the tool to ], where it went viral.<ref>{{Cite web|url=https://www.businessinsider.com/coupon-startup-honey-finds-discount-codes-on-checkout-pages-and-wows-investors-2013-1|title=New Coupon Startup 'Honey' Has Had 9 Successful Investor Meetings in a Row |last=Shontell|first=Alyson| website=]|date=January 16, 2013|access-date=September 26, 2022}}</ref> By March 2014, the company had 900,000 organic users.<ref>{{Cite web |last=Perez|first=Sarah|url=https://techcrunch.com/2014/03/25/honey-introduces-a-universal-cart-for-online-shoppers-where-savings-are-automatically-applied/|title=Honey Introduces a Universal Cart for Online Shoppers Where Savings Are Automatically Applied| website=]|date=March 25, 2014|access-date=September 26, 2022}}</ref> | ||
| Honey raised a $26 million ], led by Anthos Capital in March 2017.<ref>{{Cite news | |
Honey raised a $26 million ], led by Anthos Capital in March 2017.<ref>{{Cite news |url=https://www.latimes.com/business/la-fi-tn-honey-20171024-story.html | title=L.A. Tech: Can't find a coupon code? This L.A. start-up does all the work for you | last=Pierson | first=David | work=]|date=October 24, 2017|access-date=September 26, 2022}}</ref> By January 2018, Honey raised a total of $40.8 million in venture backing.<ref>{{Cite web|url=https://www.gobankingrates.com/net-worth/politicians/companies-that-solve-problems/|title=Got a Problem? Turn it into a Business Like These 15 Companies |last=Ketchum|first=Dan|website=GOBankingRates|date=April 11, 2019|access-date=September 26, 2022 }}</ref> | ||
| On January 6, 2020, it was acquired by ] for about $4 billion.<ref>{{Cite press release |
On January 6, 2020, it was acquired by ] for about $4 billion.<ref>{{Cite press release |url=https://www.prnewswire.com/news-releases/paypal-completes-acquisition-of-honey-300981363.html | title=PayPal Completes Acquisition of Honey | publisher=] | date=January 6, 2020|access-date=September 26, 2022}}</ref><ref>{{Cite web|url=https://www.forbes.com/sites/tomtaulli/2019/11/23/why-paypal-paid-4-billion-for-honey-science/|title=Why PayPal Paid $4 Billion for Honey Science|last=Taulli|first=Tom|website=Forbes|language=en|date=November 23, 2019|access-date=January 28, 2020}}</ref><ref>{{Cite web|url=https://www.theverge.com/2019/11/20/20974906/paypal-honey-chrome-extension-acquisition|title=PayPal acquires the company behind the Honey deal-finding extension for $4 billion|last=Peters|first=Jay|date=November 20, 2019|website=The Verge|language=en|access-date=February 25, 2020}}</ref> Nearly immediately after PayPal acquired Honey, ] claimed to its users that the extension was a security risk that sold personal information. A ] article, written shortly after the acquisition, questioned whether the claim was motivated by PayPal's newly acquired ability to compete against Amazon.<ref>{{Cite web|last=Lee|first=Dami|date=January 9, 2020|title=Amazon suspiciously says browser extension Honey is a security risk, now that PayPal owns it|url=https://www.theverge.com/2020/1/9/21059083/amazon-honey-browser-extension-security-risk-paypal-acquisition-competition|access-date=February 8, 2022|website=The Verge|language=en}}</ref> | ||
| In June 2022, the company was renamed PayPal Honey.<ref>{{ |
In June 2022, the company was renamed PayPal Honey.<ref>{{cite web |title=What is PayPal Honey? |url=https://help.joinhoney.com/article/374-what-is-paypal-honey |website=PayPal Honey |access-date=September 26, 2022 |archive-url=https://web.archive.org/web/20220926184049/https://help.joinhoney.com/article/374-what-is-paypal-honey |archive-date=September 26, 2022 |date=June 29, 2022 |url-status=live}}</ref> | ||
| ==Marketing== | ==Marketing== | ||
| PayPal Honey has become known for its heavy use of YouTube advertising and channel sponsorships for its marketing. |
PayPal Honey has become known for its heavy use of YouTube advertising and channel sponsorships for its marketing. Similarly to ], Amazon's ] and '']'', it offers paid sponsorships to popular YouTube channels to advertise the service to its viewers.<ref>{{cite web |last1=Weiss |first1=Geoff |title=Browser Extension 'Honey', a Frequent Shane Dawson and MrBeast Sponsor, Acquired for $4 Billion |url=https://www.tubefilter.com/2019/11/21/honey-shane-dawson-mrbeast-4-billion/|date=November 21, 2019|website=Tubefilter |accessdate=June 11, 2020}}</ref> | ||
| In 2019, the company became a shirt sponsor of the NBA team, ].<ref>{{Cite web |date=2023-04-18 |title=What is 'Honey' on the Clippers' uniforms? Explaining LA's jersey sponsorship patch |url=https://www.sportingnews.com/au/nba/news/honey-clippers-jersey-uniforms-sponsorship-patch/j69cmniqfrl0noqtl446jxey |access-date=2023-04-20 |website=www.sportingnews.com |language=en}}</ref> | In 2019, the company became a shirt sponsor of the NBA team, ].<ref>{{Cite web |date=2023-04-18 |title=What is 'Honey' on the Clippers' uniforms? Explaining LA's jersey sponsorship patch |url=https://www.sportingnews.com/au/nba/news/honey-clippers-jersey-uniforms-sponsorship-patch/j69cmniqfrl0noqtl446jxey |access-date=2023-04-20 |website=www.sportingnews.com |language=en}}</ref> | ||
| In 2020, PayPal Honey launched a web series called "Honey Originals", where Honey partners were interviewed, including segments "20 Questions {{nowrap|with _}}" and "Add To Cart {{nowrap|with _}}".<ref>{{ |
In 2020, PayPal Honey launched a web series called "Honey Originals", where Honey partners were interviewed, including segments "20 Questions {{nowrap|with _}}" and "Add To Cart {{nowrap|with _}}".<ref>{{cite AV media|url=https://www.youtube.com/watch?v=8fKRVDBOsdI&list=PL-rDN1-GBm-JiK4GlDR1lAVLVgpLL-fS1&index=6| title = 20 Questions with MrBeast {{!}} Honey Originals |publisher=Honey|via=]|date=July 1, 2019|access-date=September 26, 2022}}{{cbignore}} Archived at {{cbignore}} and the .{{cbignore}}</ref><ref>{{cite AV media|url=https://www.youtube.com/watch?v=Mnhnq7FwPMg&list=PL-rDN1-GBm-JiK4GlDR1lAVLVgpLL-fS1&index=4| title = Add to Cart with Gibi ASMR {{!}} Honey Originals |publisher=Honey| via=]|date=March 21, 2020|access-date=September 26, 2022}}{{cbignore}} Archived at {{cbignore}} and the .{{cbignore}}</ref> | ||
| ==Revenue== | ==Revenue== | ||
| PayPal Honey's revenue comes from a commission made on user transactions with partner retailers.<ref>{{Cite web |
PayPal Honey's revenue comes from a commission made on user transactions with partner retailers.<ref>{{Cite web|last=Rey|first=Jason Del|date=April 2, 2018|title=Honey — the under-the-radar coupon startup — has held talks to raise around $100 million in a new investment|url=https://www.vox.com/2018/4/2/17181426/honey-coupon-startup-funding-100-million-series-d|access-date=January 13, 2024|website=Recode}}</ref> When a member makes a purchase from merchants partnering with the company, Honey shares part of their commission with the member in a ] program.<ref>{{Cite web|last=Kane|first=Libby|title=A struggling dad built an app to buy his kids cheaper pizza — and now his company has 5 million downloads and $40 million|url=https://www.businessinsider.com/honey-app-ryan-hudson-2017-10|access-date=January 3, 2019|website=Business Insider|date=November 17, 2017}}</ref> Users are notified of price drops and price history on selected items sold by participating online stores.<ref>{{Cite web|last=Ellingson|first=Annlee|date=January 31, 2018|title=How Honey helps users keep their New Year's resolution to save money|url=https://www.bizjournals.com/losangeles/news/2018/01/31/how-honey-helps-users-keep-their-new-year-s.html|work=]|access-date=September 26, 2022}}</ref> | ||
| == Controversies == | |||
| {{multiple issues|{{Primary sources|section|date=December 2024}}{{Undue weight|date=December 2024|section}}|section=y}} | |||
| In June 2018, competitor ] sued Honey over patent infringement.<ref>{{Cite web |title= |url=https://ia803106.us.archive.org/8/items/gov.uscourts.ded.65616/gov.uscourts.ded.65616.218.0.pdf}}</ref> Within the litigation document, they claim "the Honey website redirects the user via an affiliate network link containing a unique identification number that corresponds to Honey, as shown by the HTTP requests."<ref name=":0">{{Cite web |title= |url=https://insight.rpxcorp.com/litigation_documents/13422145}}</ref> RetailMeNot claims that this redirection, along with other algorithms that Honey utilizes, violates multiple software patent laws; they claim that as a result, Honey is, "actively encouraging to use and obtain benefits from using Honey’s infringing system." The document also states, "the inventor had the insight that offer redemption and commission or referral rates would dramatically increase if the selection of a promotional offer were accompanied by automatic direction of the client’s browser through the appropriate affiliate- or referral-network." <ref name=":0" /> | |||
| == Fraud Allegations == | |||
| In December 2024, the YouTube channel ''MegaLag'' published a video accusing PayPal's Honey browser extension of engaging in a large-scale affiliate marketing fraud scheme, potentially costing influencers and consumers millions of dollars. The allegations centered on Honey's practices of intercepting and redirecting affiliate commissions, often at the expense of the social media influencers who had actively promoted the extension. | |||
| === Background on Affiliate Marketing === | |||
| Affiliate marketing is a system in which marketers share unique "affiliate links" that direct consumers to purchase products or services, earning a commission if the consumer makes a purchase. When a consumer clicks on such a link, a temporary browser cookie is created, ensuring the marketer earns a commission if the purchase is made later. The "last click" attribution model is commonly used in this system: the commission is granted to the affiliate whose link was clicked most recently before the purchase. Typically, the affiliate ID is stored as part of the information in these temporary cookies. | |||
| === Allegations Against Honey === | |||
| According to ''MegaLag'', Honey allegedly replaced the browser cookies of original marketers with its own affiliate cookies, positioning itself as the "last click" and redirecting commissions to its accounts. This reportedly occurred without the knowledge of either the marketers—many of whom had partnered with Honey for promotions—or the consumers. ''MegaLag'' claimed that Honey accomplished this by luring consumers with coupon code offers via pop-up messages. When users interacted with these messages, Honey purportedly replaced the affiliate tracking IDs in the background, ensuring it received the commission instead of the original affiliate marketer. | |||
| The video also asserted that Honey’s coupon offers frequently provided little or no actual value to consumers. For instance, ''MegaLag'' alleged that users who clicked on Honey's pop-ups often received a message indicating no valid coupons were found. Despite this, Honey still replaced the affiliate cookies, diverting the commission without benefiting the consumer. | |||
| === Cashback and Coupon Criticism === | |||
| ''MegaLag'' further criticized Honey's cashback program, arguing that the rewards offered to consumers were disproportionately small compared to the commissions Honey allegedly collected. An example highlighted in the video involved the purchase of a VPN service: while a typical affiliate marketer might earn $35 in commission for the sale, Honey reportedly pocketed this amount and provided the consumer with just $0.89 in cashback—approximately 2.5% of the original commission. | |||
| Additionally, ''MegaLag'' accused Honey of misleading consumers about its claim of offering "the internet's best discount codes" and "every working promo code on the internet." The video alleged that Honey collaborated with businesses to withhold higher-value coupons, instead promoting smaller discounts as "the best deals available." This practice, according to ''MegaLag'', prevented consumers from accessing more substantial savings and benefited businesses by discouraging the use of larger discounts. | |||
| === Community Reaction === | |||
| Following the release of ''MegaLag's'' video, several prominent YouTube creators—many of whom had previously partnered with Honey—published their own videos addressing the allegations. These creators expressed regret for promoting Honey without being aware of its alleged practices and apologized to their audiences. | |||
| ==References== | ==References== | ||
Revision as of 05:38, 23 December 2024
American company operating a browser extension
 | |
 Headquarters in Los Angeles, California | |
| Company type | Subsidiary |
|---|---|
| Industry | Cashback website, online coupons |
| Founded | October 2012 (2012-10) |
| Founders | George Ruan Ryan Hudson Brian Silverstein |
| Headquarters | Los Angeles, California, United States |
| Area served | Canada, United States |
| Key people | George Ruan (CEO) Ryan Hudson (Co-founder) |
| Number of employees | 209 (worldwide, 2018) |
| Parent | PayPal |
| Website | joinhoney |
PayPal Honey, formerly known as Honey, is an American technology company and a subsidiary of PayPal known for developing a browser extension that aggregates and automatically applies online coupons on eCommerce websites.
History
Entrepreneurs Ryan Hudson and George Ruan founded Honey in November 2012 in Los Angeles, California, after building a prototype of the browser extension in late October 2012. A bug tester leaked the tool to Reddit, where it went viral. By March 2014, the company had 900,000 organic users.
Honey raised a $26 million Series C round, led by Anthos Capital in March 2017. By January 2018, Honey raised a total of $40.8 million in venture backing.
On January 6, 2020, it was acquired by PayPal for about $4 billion. Nearly immediately after PayPal acquired Honey, Amazon claimed to its users that the extension was a security risk that sold personal information. A Wired magazine article, written shortly after the acquisition, questioned whether the claim was motivated by PayPal's newly acquired ability to compete against Amazon.
In June 2022, the company was renamed PayPal Honey.
Marketing
PayPal Honey has become known for its heavy use of YouTube advertising and channel sponsorships for its marketing. Similarly to NordVPN, Amazon's Audible and Raid: Shadow Legends, it offers paid sponsorships to popular YouTube channels to advertise the service to its viewers.
In 2019, the company became a shirt sponsor of the NBA team, Los Angeles Clippers.
In 2020, PayPal Honey launched a web series called "Honey Originals", where Honey partners were interviewed, including segments "20 Questions with _" and "Add To Cart with _".
Revenue
PayPal Honey's revenue comes from a commission made on user transactions with partner retailers. When a member makes a purchase from merchants partnering with the company, Honey shares part of their commission with the member in a cashback program. Users are notified of price drops and price history on selected items sold by participating online stores.
References
- ^ Metcalf, Tom; Verhage, Julie (January 28, 2020). "Coupon Duo Now Worth $1.5 Billion After Honey's Sale to PayPal". BloombergQuint. Archived from the original on December 9, 2020. Retrieved January 28, 2020.
- ({URL="https://www.equitynet.com/c/honey-science"})
- Vincent, Roger (August 1, 2018). "Online coupon firm Honey taking over historic Coca-Cola plant in Arts District". Los Angeles Times. Retrieved January 3, 2019.
- Shontell, Alyson (January 16, 2013). "New Coupon Startup 'Honey' Has Had 9 Successful Investor Meetings in a Row". Business Insider. Retrieved September 26, 2022.
- Perez, Sarah (March 25, 2014). "Honey Introduces a Universal Cart for Online Shoppers Where Savings Are Automatically Applied". TechCrunch. Retrieved September 26, 2022.
- Pierson, David (October 24, 2017). "L.A. Tech: Can't find a coupon code? This L.A. start-up does all the work for you". Los Angeles Times. Retrieved September 26, 2022.
- Ketchum, Dan (April 11, 2019). "Got a Problem? Turn it into a Business Like These 15 Companies". GOBankingRates. Retrieved September 26, 2022.
- "PayPal Completes Acquisition of Honey" (Press release). PR Newswire. January 6, 2020. Retrieved September 26, 2022.
- Taulli, Tom (November 23, 2019). "Why PayPal Paid $4 Billion for Honey Science". Forbes. Retrieved January 28, 2020.
- Peters, Jay (November 20, 2019). "PayPal acquires the company behind the Honey deal-finding extension for $4 billion". The Verge. Retrieved February 25, 2020.
- Lee, Dami (January 9, 2020). "Amazon suspiciously says browser extension Honey is a security risk, now that PayPal owns it". The Verge. Retrieved February 8, 2022.
- "What is PayPal Honey?". PayPal Honey. June 29, 2022. Archived from the original on September 26, 2022. Retrieved September 26, 2022.
- Weiss, Geoff (November 21, 2019). "Browser Extension 'Honey', a Frequent Shane Dawson and MrBeast Sponsor, Acquired for $4 Billion". Tubefilter. Retrieved June 11, 2020.
- "What is 'Honey' on the Clippers' uniforms? Explaining LA's jersey sponsorship patch". www.sportingnews.com. April 18, 2023. Retrieved April 20, 2023.
- 20 Questions with MrBeast | Honey Originals. Honey. July 1, 2019. Retrieved September 26, 2022 – via YouTube. Archived at Ghostarchive and the Wayback Machine.
- Add to Cart with Gibi ASMR | Honey Originals. Honey. March 21, 2020. Retrieved September 26, 2022 – via YouTube. Archived at Ghostarchive and the Wayback Machine.
- Rey, Jason Del (April 2, 2018). "Honey — the under-the-radar coupon startup — has held talks to raise around $100 million in a new investment". Recode. Retrieved January 13, 2024.
- Kane, Libby (November 17, 2017). "A struggling dad built an app to buy his kids cheaper pizza — and now his company has 5 million downloads and $40 million". Business Insider. Retrieved January 3, 2019.
- Ellingson, Annlee (January 31, 2018). "How Honey helps users keep their New Year's resolution to save money". American City Business Journals. Retrieved September 26, 2022.
See also
Categories:- PayPal
- American companies established in 2012
- Internet properties established in 2012
- Technology companies based in Greater Los Angeles
- Companies based in Los Angeles
- Internet Explorer add-ons
- Nonfree Firefox WebExtensions
- Google Chrome extensions
- Reward, cashback and comparison-shopping digital platforms
- 2020 mergers and acquisitions