BuyWithMe has big competitors, clearly: Groupon raised $950 million earlier this year after spurning a Google offer and it is expected to raise about $750 million more through its IPO; LivingSocial took in nearly $600 million across two rounds of fundraising in six months’ time. Gilt Groupe sought and secured nearly $140 million en route to a $1 billion valuation. And some of BuyWithMe’s well-capitalized competitors are dispensing money to build scale and quickly develop a merchant roster.
BuyWithMe, on the other hand, has less ambitious plans. Given that the company has raised less than $25 million to date, that’s not shocking. However, our source says that the company—which has been snapping up smaller competitors in the U.S. this year—will stick to its knitting and maintain a North America-only focus as it continues to develop both by organic growth and M&A.
That isn’t to say the daily deals site has taken its growth plan slow. In fact, BuyWithMe has teed up a number of deals this year to expand its footprint. Last month, it bought Groop Swoop, a San Francisco-based competitor, keeping founder Taylor Wang on board to follow up on new developments. Also in May, BuyWithMe bought DealADayOnline. And, in March, it made its first buy: LocalTwist, a division of LifeStreet Corp., which enhanced its presence in San Diego and Seattle.
Further, peHUB’s source says, BuyWithMe is counting on a merchant-focused service plan generating long-term relationships for the daily deals site—something that, as of late, larger competitors have struggled to provide with consistency. This even includes buying up technology that complements business owners’ user experience, including account management products and analytics tools, our source said.
Where BuyWithMe hasn’t bought out competitors, it has developed locations organically: it has launched operations in Houston, Dallas, Phoenix, Philadelphia, Washington DC, Boston and other metropolitan regions throughout the US since its 2009 founding.
The daily dealer’s M&A spree came after its January hire of Jim Crowley as CEO. Crowley came to BuyWithMe after working as president and CEO of Turbine Inc., an online gaming business that was acquired by Warner Bros. Entertainment in 2010. BuyWithMe has raised more than $20 million so far from investors including Bain Capital Ventures and Matrix Partners.
Where daily deals sites haven’t been consolidating (LivingSocial has bought a number of startups, as well), they’ve been fundraising to try and keep pace with behemoth competitors. In May, peHUB reported New York daily deals site Group Commerce snapped up about $10 million in funding from investors Lerer Media Ventures, Spark Capital and Carmel Ventures.