LOS ANGELES -- Ryan Hudson was trying to order pizza online for his two children when he was prompted to enter a coupon code at checkout.
Hudson knew better than to bother searching for a discount. His kids were hungry and he didn't have time to scan the internet for coupons that had either expired or didn't apply to the cheese pizza he wanted to order.
"And then it hit me. Why can't I just automate the process?" said Hudson, a computer engineer turned entrepreneur.
The software Hudson cobbled together that night would form the basis for a startup he cofounded called Honey.
Headquartered in downtown Los Angeles, Honey offers a free extension for Google Chrome, Firefox and Safari that aggregates discount codes for whichever shopping site a user visits.
When it comes time to make an online purchase, the extension automatically applies any code it finds that saves the shopper the most money. Since there's no need for customers to navigate away from a checkout page in search of coupons, shoppers who use Honey's extension are 55 percent more likely to complete a transaction than those that don't, the company says.
"It's better for the shopper because you don't have that feeling you paid too much," said George Ruan, Honey's other cofounder. "But it's also better for the merchant because people are completing the purchase."
Honey's extension, which appears at the top right corner of the browser, works with thousands of online stores. The company's 5 million users save an average of $32 a month. Already this year, users have collectively saved $170 million through discounts, more than the $109 million saved all of last year.
Honey compiles information about the coupons that work and the ones that don't through its users (kind of like how drivers feed traffic data to Waze). The company says it does not share that data with any third parties.
In addition to its extension, Honey operates a website promoting shopping deals, which garners 10 million unique monthly visitors.