"We see a lot of opportunity to make it easier for people to shop across stores," said Hudson, 37, who launched the company in 2012 with Ruan. "There hasn't been anybody helping the average consumer solve this problem."
The company makes money from commissions earned by directing users to specific merchants. Honey splits those commissions with users who sign up for a no-cost rewards program called Honey Gold.
Hudson and Ruan scraped together $100,000 to launch the company, but have since raised $40.8 million in venture backing -- most of which came from a previously unreported $26 million Series C funding round in March led by Anthos Capital.
The infusion of cash has helped Honey launch a hiring spree. The company started the year with 30 employees. It now has 100 and has plans to add another 50 staffers.
Bryan Kelly, managing partner at Anthos, said Hudson and Ruan never pitched the startup to his firm. Rather, Anthos employees discovered Honey because they were hooked on the extension.
"Their approach is genius," Kelly said. "They're not asking the consumer to do anything other than save money. The experience is frictionless."
Hudson and Ruan said Honey was profitable, but declined to disclose its revenue.
Honey currently offers discount deals for 21,000 online merchants. About 9,000 of those merchants pay Honey commissions for delivering sales, including Macy's, Target and Wal-Mart.
Amazon, however, isn't one of them -- and that represents Honey's biggest risk. The online retailing giant currently commands 37 percent of all U.S. e-commerce sales, according to Needham & Co.
By 2021, that number is expected to reach 50 percent, leaving Honey with even fewer merchants as potential partners.
Hudson and Ruan say there's little they can do except hope consumers shop elsewhere in recognition Amazon needs competition to keep prices down.
Still, Honey has found a way to stay relevant to Amazon shoppers by including a price-tracking feature in its coupon code extension. The tracker, called Droplist, can be programmed to notify Honey users when an item's price on Amazon has fallen to a desired level so they can pounce on the purchase.
Honey is currently only available on desktop -- which explains why Hudson and Ruan failed to interest investors when they first started. Despite the mobile revolution, Honey's founders argued comparison shopping still lived -- and lives -- on desktop.
"Most Americans have 20 years' experience of comparison shopping on their desktops," said Ruan, 38. "So our thesis was it was very difficult to get people comfortable checking out on one site only. It's very hard to do comparison shopping and look up coupons on your phone."
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