Entrepreneurs Ryan Hudson and George Ruan founded Honey in November 2012 in Los Angeles after building a
prototype of the browser extension in late October 2012. By March 2014, the company had 900,000 organic users. In 2014, Honey raised a seed round of approximately $1.8 million from a group of investors that included Mucker Capital, Bam Ventures, Ludlow Ventures, and SXE Ventures. Honey raised a $26 million
Series C round, led by Anthos Capital in March 2017. By January 2018, Honey had raised $40.8 million in venture backing. In 2020, it was acquired by
PayPal for about $4 billion, after which it became part of PayPal's rewards program. In December 2019,
Amazon told 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 2020, the
Better Business Bureau started to investigate a Honey advertisement claiming: "With just a single click, Honey will find every working code on the internet and apply the best one to your cart". Honey told the BBB that it was already taking steps to discontinue the ad, and after it did so, the investigation was closed.
Business practice allegations and lawsuits In December 2024,
YouTuber MegaLag released a video alleging that the Honey
browser extension re‑attributes sales made through
affiliate marketing programs by modifying affiliate links at checkout, crediting Honey with the sales even when no coupon was applied. This practice was described as a form of
cookie stuffing. The video further claimed that Honey enables partnered vendors to control which discount codes users see by excluding more favorable codes. In March 2025,
Google updated its
Chrome Web Store policies to prohibit extensions from claiming affiliate commissions without providing discounts. Honey then modified its extension to stop claiming affiliate revenue in cases where no discount was applied. By May 2025, Honey had lost more than 4 million users, and similar class action lawsuits were filed against competitors such as Microsoft Shopping and
Capital One Shopping, which were accused of engaging in comparable practices. On December 21, 2025, MegaLag released a second video with additional allegations against Honey's business model. The video claimed that Honey scraped private coupon codes and shared them with its user base without the knowledge of the original users, refusing to remove the codes when contacted by businesses. Instead, Honey allegedly encouraged businesses to partner directly with the platform. The video also alleged that Honey collected personalized user data beyond shopping activity. A third video, released on December 30, 2025, alleged that Honey incorporated code into its extension to evade detection by affiliate networks, which prohibit tools from replacing existing publisher codes with their own. By the end of 2025, Honey had lost approximately 8 million users on the Chrome Web Store. On January 12, 2026,
Rakuten Advertising removed Honey from its affiliate network.
Class action lawsuits On December 29, 2024, three law firms, including one operated by YouTuber
LegalEagle, filed a
class action lawsuit against PayPal in United States federal court in connection with the alleged affiliate marketing controversy. The suit alleged intentional interference with contractual and prospective economic relations,
unjust enrichment,
conversion, and violation of
California's Unfair Competition Law.
Sam Denby of
Wendover Productions and
Ali Spagnola were named as plaintiffs. The controversy gained further traction on January 3, 2025, when the technology review outlet
GamersNexus filed another class action lawsuit through law firm Cotchett, Pitre & McCarthy, LLP. The suit alleged conversion, interference with contractual relations, and violations of North Carolina's Unfair and Deceptive Trade Practices Act. The initial class action lawsuit was dismissed in late November 2025. Federal Judge Beth Labson Freeman said that the complaint had not identified a "cognizable injury" and did "not establish the Plaintiffs were in fact entitled to those commissions pursuant to their contracts with the merchants." The court granted leave to amend the case and the plaintiffs filed an amended complaint in early January 2026. ==Marketing==