Bam Ventures Made $45 Million On A $150,000 Investment In Honey

By Amit Chowdhry ● November 24, 2019
  • Earlier this week, PayPal announced it was acquiring Honey for $4 billion. And Bam Ventures made 300 times its investment in Honey as a result.

Earlier this week, it was announced that PayPal was buying Honey for $4 billion. Prior to the acquisition, Honey had raised about $49 million in venture capital funding. But before Honey got big, the company faced rejection after rejection from venture capital firms before a few seed investors injected $1.8 million into the company.

The Honey browser extension is known for applying coupons during the check-out phase of e-commerce websites like Amazon and PizzaHut.com. And Honey generates revenue by taking a commission on the money saved from the coupon codes. At the time of the acquisition, Honey had 30,000 merchants on its network and 17 million monthly active users. Last year, Honey hit $100 million in revenue.

PayPal was interested in buying Honey in order to expand beyond working as a checkout service. And Honey was also interested in getting into payments, which is PayPal’s specialty.

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Honey was founded in 2012 by George Ruan and Ryan Hudson. And some of the company investors include younger venture capital firms like Mucker Capital, Ludlow Ventures, and Bam Ventures.

Mucker Capital co-founder and partner William Hsu was the first investor in Honey. And he passed on the company the first time that Hudson approached him.

“The first time Ryan pitched us, we actually were too stupid to invest,” said Hsu via the L.A. Times. “They actually couldn’t raise money from anyone in L.A. for a couple of years, so he took a job and kept running Honey on the side.”

Bam Ventures co-founder and managing director Richard Jun told Business Insider that Honey was considering raising more funding before the acquisition in order to hit the next major milestone.

According to Business Insider, Bam Ventures put $150,000 in Honey’s seed round of funding, which is an investment that is now worth 300 times at $45 million.

After the acquisition was announced, Ludlow partner Brett deMarrais tweeted a photo with Ludlow managing partner Jonathon Triest and the founders of Honey with a caption that says:

“This photo is the moment after Jonathon Triest and I agreed to invest in the seed round after ‘diligencing’ Honey on a walk around the block. Jonathon asked for this photo and half-jokingly said ‘I’ll save this for when you sell for billions.’”