US social commerce site Groupon buys Citydeal
The Local · 17 May 2010, 15:41
Published: 17 May 2010 15:41 GMT+02:00
Groupon, which takes its name from “group” and “coupon,” offers daily deals to customers who team up for special discounts. Vendors are encouraged to participate since Groupon ensures there will be a critical mass of extra business before a discount becomes valid.
Estimated to be worth $1.35 billion, the Chicago website’s social commerce business model has sparked several imitators overseas, including Berlin-based Citydeal.
“We knew that bringing Groupon to Europe wouldn’t be easy,” said Groupon CEO Andrew Mason in a statement. “Just adapting Groupon to suit the differences between Miami and Philadelphia is enough of a challenge that we knew we wouldn’t be able to succeed in Europe without amazing entrepreneurs with an intimate understanding of the local cultures.”
Citydeal only started operating in January, but is backed by Germany’s legendary Samwer brothers, high-tech entrepreneurs behind several leading German websites mimicking the successful US companies including the likes of eBay and Facebook.
“After a few days with Oliver (Samwer) and the rest of the Citydeal management team, we realized that they were among the best operators we’d ever met,” said Mason. “Oliver and his two brothers are known for elevating the practice of cloning American business models in Europe into an art form.”
Citydeal’s 600 employees across Europe will now join Groupon’s 300-person team. The combined firm will operate in 140 cities in 18 countries. The deal’s price was not announced.