BuyWithMe Scoops Up New York City’s Scoop St.August 16, 2011
All Things Digital
by Tricia Duryee
Daily deal contender BuyWithMe has acquired its fifth company this year, purchasing Scoop St., a company focused on offering discounts exclusively for New York City.
Terms of the deal were not disclosed.
Acquistions in the space are heating up and are happening nearly every day, as smaller players struggle to stay afloat. Many are looking to gain scale for a chance at competing against such giants as Groupon and LivingSocial. A recent report found that daily deal acquisitions were up 700 percent since last year.
Given the drastic dropoff in market share between the leaders and the rest of the masses, the transactions are typically small and consist of players looking to enter new markets. Up until now, Groupon and LivingSocial have focused their attention on acquiring companies to expand internationally, and have not been gobbling up smaller players domestically.
Scoop St.’s co-founder David Ambrose said the sale was an all-cash offer, adding that its investors, who pumped $1.2 million into the start-up, saw a “good return.”
In this case, BuyWithMe was already operating in its hometown market of New York City, but will gain Scoop St.’s eight employees and its subscriber list of 50,000. Scoop St. had also developed other features, such as “Experiences,” which offered access to special events, loyalty programs and mobile applications that allowed users to purchase deals immediately, based on their location.
Ambrose said Scoop St., which had enough capital to last until the end of the year, was just beginning to seek more funding when BuyWithMe approached it. He added that it was a perfect fit, given that both companies have been operating in the business since 2009; for a short time, they even had offices a block away from one another.
“We learned a lot as entrepreneurs in a really hot market and watched how companies have gotten started, and how some have been successful and raised a lot of money, and how others folded. We are still really bullish about the space … It made perfect sense for us,” he said.
BuyWithMe now operates in 13 markets. It recently acquired Edhance, which had developed loyalty and rewards programs for customers; it also acquired other players in San Francisco, Chicago, Seattle and San Diego.