AfterWorkDeals, BuyWithMe, CouponDudes, DailyDeals, E-shopsMarket, Group Commerce, HomeRun, ilikeadeal, JumpUpon, KGB Deals, LivingSocial, MyPetDeals, the New York Times’ daily deals, OzVoucherCodes, Priceline’s newest vertical, Qustodian, ReachLocal, SaleCamel, Thrillist, UrbanGain, VouChaCha, WeFeast.com, XYmob, YourBestDeals and last, but not least, Zulily.
All that’s missing is the “F:” Facebook. The social network just elected to bow out of the daily deals business, aside from one notable segment. The “why” is either enticing or alarming to venture capitalists, based on whether they were early- or late-stage investors in daily deals sites, as well as where those companies stack up in the ever-thickening industry hierarchy.
Secondary market experts note several daily deal sites’ valuations have stagnated or fallen in the month of August, in some cases because investors are holding off trading on certain start-ups (like LivingSocial and Groupon) that have already registered S-1s. In other cases, investors unwilling to drive up the valuations of daily deals sites are simply responding to broader trepidation regarding markets, as well as issues specifically facing the nascent industry.
To be sure, regardless of how overcrowded the valuation elevator gets with web competitors, the daily deals space is still a growing one, anticipated to expand about five-fold over a five-year span from about $900 million last year to about $4 billion in 2015. As the business increasingly goes from the inbox to the mobile device, consumers can be better and more frequently targeted with highly-localized deals, and the start-ups that adapt best to this trend shift will remain with consumers wherever they go.
Highlighting the importance of the mobile segment of the daily deals industry, Facebook will retain one function through which consumers can check specific sites’ bargains, its “Check-in Deals”—but it will no longer run e-mailed solicitations à la Groupon, Gilt Groupe and so many others from the alphabet soup. Perhaps Facebook is betting that more than an e-mail or even a text, all consumers need to make their next purchasing decision is a map.