Today comes news of a small but indicative acquisition in the area of daily deals: the UK-based deals aggregator Coupobox has been bought by rival site DealCollector for a song: the price was in the “lower six figures,” according to Stavros Prodromou, the founder and former CEO of the company.
The acquisition is a sign of how consolidation in the sector is hitting aggregators, too. Counting flash sales and private buying clubs with daily deals, there are an estimated 105 sites in the UK alone, with 1,400 across all of Europe, and there will likely be more companies bought or cast by the wayside going forward. ”From the consumer point of view we are currently too overloaded with daily deals,” says Prodromou.
Prodromou, who in the past was general manager for Groupon in the UK and is now CEO of an industry organisation called the Global Daily Deal Association, says that part of the reason he has sold up is so that he can spend more time on the GDDA, campaigning for better standards and practices among other sites. In fact, the acquisition is the opposite of an aqui-hire: none of Coupobox’s founders or small staff went along with the sale.
The deal will help DealCollector, which started in Germany as Tagesangebote, continue its expansion in the UK.
This is part of a wider strategy for DealCollector, according to Prodromou. The company, he says, plans to make even further inroads across all of Europe and beyond, through the acquisition of local aggregators rather than grow organically.
“Our acquisition of Coupobox will bolster the company’s position in the daily deal sector and enhance our strategic partnerships; it’s an exciting prospect for DealCollector,” said Mathias Jacobs, CEO of DealCollector, in a statement. The company does not disclose its total number of subscribers, but it was one of the very first aggregators to emerge in the wake of Groupon’s growth and the many cloning sites that followed.
Coupobox was founded in 2010 by Prodromou with Tolga Oenal and Alex Petrov and was bootstrapped in funding. But despite its small user base — between 60,000 and 70,000 subscribers — it claims to be profitable.
Partly, that was because of its proportion of repeat users — between 15 and 20 percent, he says. It also had a very small number of employees — only four, and developed its software in-house with no outsourcing. And the company had a robust data analytics and advisory service and provided consulting to the selection of deals sites that it aggregated, which included Groupon, Gumtree, Time Out and others.
Extending beyond basic daily deals is probably the smart strategy for companies in this maturing area — it’s the same one being taken by Groupon, whose CEO Andrew Mason envisions the company as the “operating system for local commerce.”