German Groupon clone Citydeal gets €5m in second round

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Citydeal[Germany] The Samwer brothers have done it again.

In December, Germany’s most prolific startup founders pumped millions from France and Sweden into their Internet companies. Now the three brothers have secured a €5 million second round for their Groupon clone Citydeal, which they only founded in December.

The new investment comes from an international group made up of the Swedish Investment AV Kinnevik, along with Germany’s Holtzbrinck Ventures and eVenture Capital Partners and, of course, the Samwers’ own incubator Rocket Internet.

In January, the same set of investors already provided €4 million of funding and a third round is said to be in the making.

Berlin-based Citydeal claims to be the market leader among the 15 or more Groupon clones in Germany. The site offers daily bargains of up to 50 per cent discounts on stuff to do, see, eat and buy in 40 cities across Germany. The offers change every day. If enough people sign up before midnight they get a voucher by email for a €60 dinner at only €30 or a nicely discounted wellness treatment, for example.

Citydeal plans to use the new investment to fund further expansion and related marketing activities. With plenty of money in the bank and the Samwers’ SEO connections, the company looks destined for future growth. It already claims to have increased its user numbers “by 1,000 per cent from January to February”, with the Internet measurement firm Nielsen allegedly counting “ten times more users for Citydeal than for its next smaller competitor” – a likely reference to Dailydeal from Last.FM’s first investor Stefan Glänzer, which also comes second in Google Ad Planner’s unique user numbers.

While hastily launching in 40 different cities in Germany, the company has also quietly started to roll out internationally. Citydeal already has local websites and bargain offers in six other European countries: UK, France, Italy, Spain, Austria and Switzerland.

And although Germany’s Mr Startup, Lukasz Gadowski of Team Europe Ventures, recently declared that he doesn’t believe in the Groupon model for Europe because it’s very capital intensive and we simply don’t have the American coupon culture, the market here seems to be getting hotter and hotter. German Groupon clones are blossoming like mushrooms and even regional newspapers are launching their own copycats.

  • http://maxniederhofer.com Max Niederhofer

    Wow, am I glad I’m not playing this game… the Samwers are just a force.

    • http://www.blackdog.ie/ paul savage

      It’s an ultra competitive market, I’ve used citydeal.de , and it works quite well. They offer an aggressive €6 bonus to people for referring people to their service. Their marketing efforts on AdWords and FaceBook are also quite strong.

      I’ve actually used CityDeal and I found it quite good as a service. Germans are very receptive to “saving money”, but I guess then again, who isn’t.

      Paul

    • Karl

      A force that holds 96% of that company.

    • CE

      Max:

      Er, “fail fast” with Coopon?

      Chico

      • http://maxniederhofer.com Max Niederhofer

        I had half a product built in 3 weeks, took the time to talk to all of the competitors, thought hard whether I wanted to spend the next five years embroiled in this game and then decided not to for a bunch of reasons. Really most of them pretty obvious: am I doing this to “make a dent in the universe” or just to make a quick buck? What are my real motivations? What problems am I really solving? Do I personally care enough about them? Am I adding value? Will I grow by running this business?

        Some of the players were executing extremely well. I thought I’d be better in a market where I could lead, not follow. So I pulled the plug.

      • Bastian Lehmann

        Sometimes it can be better to be lead by the market than being the one who pushes it – just saying. :)

      • CE

        +1

        Refreshingly honest.

        Thanks.

      • http://www.aurusit.com Rahul Dhingra

        Hi Max,

        Excellent points all in all.

        I do however think that a groupon like business(being a deal a day) leaves a lot of room for multiple websites to share the space rather than competing. I dont see why end users would’nt end up following multiple websites rather than just 1. It really boils down the quality of the actual deals.

        Additionally, while this may not cater to being a mainstream business (although groupon looks like its a growing team), with the right technology it can be run with little staff as a side business and revenues can always be used for bigger ventures. I dont believe, one can run to investors for every idea which we believe can make it big, sometimes its best to run these businesses and use the revenues (although small) to fuel bigger ideas.

        – Rahul

  • David Whitewood

    The Samwers are smart – they invest in proven business models with revenue that are largely derisked and ready for scale. Its all execution now!
    The challenge now must be sales to get the merchants and inventory online.

  • http://www.seedcatalyst.com Rhitu

    It may not seem like a European model but the pickup of such services is relevant enough in the current scenario to be seeing a lot of VC money flow in
    http://bit.ly/9Uz1gA

  • Bastian Lehmann

    I’m with Lukasz on this one. Despite the fact that i know 8 people running a startup in this space, i just can’t see this taking off. Then again, i might be wrong. The current financial situation might lead to a heavier coupon usage, retailers might push this. Ultimately though, this is not a battle that will be won via a platform, but agreements with retailers, brands or in several niches with high margins.

    That’s at least what i would work on, if i would run one of these joints.

  • Felix Fidelsberger

    Groupon is not about “save 25 ct on a chocolate bar”-coupons, but heavily discounted promotions. Take a loot at any Media-Markt/Saturn catalogues and the “Geiz-ist-geil” mentality. Don’t see any reason why this should not work in Europe.

  • Bill

    Are they only leaders in the space in germany? I note that there are several uk start ups and some doing better than them…. do you think they are spreading themselves too thinly with launching in many countries?

  • Liam Young

    Great news! They are kicking some serious ass… mycitydeal is a great player in this market.

  • http://stephanminard.wordpress.com/2010/03/31/peixe-urbano-le-bresil-ouvre-un-site-de-couponing/ Peixe Urbano : le brésil ouvre un site de « couponing  « Hyperlocal : journalisme, marketing, communautés.

    […] Pour voir ce qui peut se faire ailleurs dans le monde vous pouvez également jeter un coup d’oeil à Snippa(UK), Daily Deal(Germany), et CityDeal(Germany). […]

  • http://startupi.com.br/2010/startup-brasileira-abre-para-ajudar-consumidor-a-encontrar-ofertas-diarias/ startupi » Startup brasileira abre para ajudar consumidor a encontrar ofertas diárias

    […] o que diz-se tê-los poupado 117 milhões de dólares). Exemplos de cópias: Snippa, Daily Deal, CityDeal (que, mesmo como “imitação”, recebeu há algumas semanas investimento de 5 milhões […]

  • http://rlsblog.thebizinsidernews.com/?p=68 Peixe Urbano: Brazil Gets A Groupon-Like Deal Site

    […] international Groupon-like we’ve covered include Snippa(UK), Daily Deal(Germany), and CityDeal(Germany). And there are plenty more — the UK alone has at least a half dozen Groupon clones. […]

  • http://startupi.com.br/en/2010/new-brazilian-startup-helps-consumers-find-daily-offers/ startupi » New Brazilian startup helps consumers find daily offers

    […] since 1998, generating 117 million dollars in sales). Examples of imitators: Snippa, Daily Deal, CityDeal (which, though it is a copycat, received 5 million Euros in investment several weeks […]

  • http://vc-list.com/?p=3518 Gilt Launches Groupon Competitor ‘Gilt City’ In NYC | Venture Capital & Angel Investors Lists News and Jobs

    […] is only the latest in a long, long string of Groupon-like sites to launch recently, but it’s in a better position than most. Gilt […]

  • http://www.567t.com/archives/639 Gilt Launches Groupon Competitor ‘Gilt City’ In NYC

    […] is only the latest in a long, long string of Groupon-like sites to launch recently, but it’s in a better position than most. Gilt […]

  • http://www.caglarerol.com/2010/04/27/klon-savaslari-turkiyede-kim-kazanacak/ Çağlar Erol » Blog Archive » Klon savaşları: Groupon modeli Türkiye’de iş yapacak mı?

    […] kurduğu DailyDeal. CityDeal, Ocak ve Mart aylarında iki turda toplam 9 milyon Euro‘luk yatırım aldı ve Almanya dışında Fransa, İngiltere, İspanya, Polonya, ve son olarak da Türkiye‘de […]

  • http://socialcommercetoday.com/how-brands-retailers-can-profit-from-the-social-commerce-group-buy-trend/ How Brands & Retailers Can Profit from the Social Commerce Group-Buy Trend | Social Commerce Today

    […] Ventures (taking total funding this year to $44m).  Meanwhile, German Group-Buy site, CityDeal recently received a further $5m Samwer brothers funding, and event shopping giant Gilt has just invested in creating its own local Group-Buy brand – […]

  • http://socialshoppingnews.landheremedia.com/2010/04/30/how-brands-retailers-can-profit-from-the-social-commerce-group-buy-trend/ How Brands & Retailers Can Profit from the Social Commerce Group-Buy Trend | Social Shopping News

    […] Ventures (taking total funding this year to $44m).  Meanwhile, German Group-Buy site, CityDeal recently received a further $5m Samwer brothers funding, and event shopping giant Gilt has just invested in creating its own local Group-Buy brand – […]

  • http://www.social-deal.com barbara

    Social-deal,
    unico ad essere prodotto da una azienda informatica italiana, con staff internazionale, permette di acquistare beni di necessità e svago con sconti eccezionali. Non è una vendita on line, non è la solita asta ma un luogo virtuale che fa incontrare, fisicamente azienda e acquirente. Come funziona?
    L’utente del web entrando in social deal, troverà nella sua città una sola offerta al giorno, di un prodotto o evento in vendita ad un prezzo scontato dal 50 al 90% rispetto al prezzo d’acquisto: si tratta di occasioni che riguardano la vita quotidiana, beni di necessità e di svago.
    Le offerte durano per un breve di tempo breve, ad esempio 24 ore, e hanno bisogno di un numero minimo di aderenti; Occorre registrarsi, per raggiungere più velocemente la soglia richiesta, si possono condividere (social networks) con i propri amici. Infatti social deal è presente anche su Facebook e Twitter per dialogare direttamente con gli acquirenti.
    Una volta raggiunta la soglia minima stabilita da chi propone un acquisto vantaggioso, si avrà diritto all’offerta e verrà recapitato tramite mail un buono, coupon, da e da utilizzare nei termini previsti. Così l’utente andrà fisicamente nel negozio a ritirare il suo acquisto.
    Per le aziende è una grande occasione di visibilità a costo zero.
    La novità di social deal riguarda è che sarà possibile devolvere, attraverso l’acquisto, azioni di beneficenza certificate.
    Il 24 maggio Social deal entra nel web (www.social-deal.com) per la città di Firenze, buon risparmio!

  • http://www.agriya.com/groupon-clone sathe

    Groupon has taken the Internet world by storm since its launch in 2008. The concept is very simple, each day all the subscribers are emailed a single fantastic deal. http://www.agriya.com/groupon-clone

    Groupon Clone

  • http://massivecoupon.com Rob

    We’ve just cancelled our groupon clone launch and instead released our clone for free!

    http://www.massivecoupon.com/deals/groupon-clone/

    http://www.massivecoupon.com/deals/groupon-clone/

  • http://gadgetfee.com/?p=991 Peixe Urbano: Brazil Gets A Groupon-Like Deal Site « Gadget Fee

    […] international Groupon-like we’ve covered include Snippa(UK), Daily Deal(Germany), and CityDeal(Germany). And there are plenty more — the UK alone has at least a half dozen Groupon clones. […]

  • http://www.webton.nl Webdesign

    Great article. Wow, am I glad I’m not playing this game…. Keep on the good job!

  • http://www.vwebdesign.nl Website laten maken

    Great Article! I’m not playing this game too!

  • http://www.qibug.com/2010/04/gilt-launches-groupon-competitor-%e2%80%98gilt-city%e2%80%99-in-nyc/ Gilt Launches Groupon Competitor ‘Gilt City’ In NYC | Tech stuff center

    […] is only the latest in a long, long string of Groupon-like sites to launch recently, but it’s in a better position than most. Gilt […]

  • http://martinoblog.net/2011/10/04/evaluation-of-wikipedia-article-groupon-mycitydeal/ Evaluation of Wikipedia article Groupon MyCityDeal | My Blog
  • Sybrant Technology

    Group on is loosing….its  investment Be aware…

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