(CNN) - PayPal has struck a deal to acquire Honey, a shopping platform that offers online shoppers discounts and rewards, for $4 billion, according to a release Wednesday.
The acquisition comes as PayPal faces increased competition from tech companies such as Apple, Google and Facebook, which now offer either their own forms of payment or payment processing. PayPal is also battling stalwart credit card networks like Visa and Mastercard, which are expanding their online payment offerings.
Investors seemed unconcerned by the price tag of the acquisition. Shares of PayPal were down less than 1% in early trading Thursday following the announcement.
Honey Science Corporation operates as both a web browser add-on and a mobile app, offering consumers discount codes to roughly 30,000 online retailers.
It's a competitor to sites like RetailMeNot that collect promo codes and aggregate them for consumers. Honey differentiates itself by automatically inputting all eligible promo codes for shoppers during checkout and uses the code with the biggest discount.
The discount site features a mobile shopping assistant, tracking tools and alerts, price history information, special offers and a rewards program.
PayPal, which also owns Venmo, has more than 275 million active consumer accounts and 24 million merchant accounts.
Honey was founded in 2012 and is headquartered in Los Angeles. It has 17 million monthly active users, according to the release. Many of its users tend to be younger, overlapping with Venmo's user base, according to a PayPal call on Wednesday with analysts.
Honey has raised more than $30 million from investors, according to Crunchbase.
The acquisition still needs regulatory approvals but the companies expect it to close in the first quarter of 2020.
Once the acquisition is finalized, Honey will keep its headquarters in Los Angeles. Its co-founders will continue to lead the Honey team.