TrustedPlaces, one of the UK’s earliest ‘social’ local review startups, has admitted that they were in speculative sales talks until recently. I confirmed with co-founder Walid Al Saqqaf who said that they were unexpectedly approached two months ago by an interested party looking to acquire the site.
As a result of this interest he said he and co-founder Sokratis Papafloratos decided to start a process “to see who else was interested.”
However, after several negotiations they have decided to put these talks on the back-burner and keep going until they are cash flow positive.
Al Saqqaf told me the sale process had turned out to be “a distraction” now that the “growth in revenue is reflecting the growth in trafffic.” He says the company is projected to be cash flow positive by the second quarter next year, and said they were in a good position funding-wise. So far the site gets its revenues from brand advertising, sales to local businesses via a sales agent, a sales service tool for businesses, and bookings made via Top Table. TrustedPlaces members can review restaurants, bars, hotels, cafes and share information and profiles.
TrustedPlaces must be confident about their position if they turned down a sale offer, or perhaps their original backers think they would get a better price for the startup once it is in a better cash position. In May 2006, the startup won £500,000 venture backing from HOWZAT Media, the investment fund started by Cheapflights’ David Soskin and Hugo Burge.
Meanwhile Qype has rocketed ahead of most of the Yelp-like sites in Europe and the UK. Perhaps it now wants to hoover up the rest of the market with an acquisiton spree? In September it secured an additional €8 million funding.
Update: Qype founder Tweets “no shopping spree from qype.”