German Groupon clone Citydeal gets €5m in second round

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.