Crowdsavings.com continues to daily deals slog
By Erin Griffith
On November 1, 2012
Not terribly long ago, the burgeoning daily deals industry was heralded as a crazy revolution in commerce business models, sure to change local marketing forever. But its leader Groupon’s fall from grace has dealt a blow to the entire sector. Even if you discount (heh) Groupon’s problems as unique to itself, its competitor, LivingSocial, hasn’t fared much better. Amazon has written down $169 million of its $175 million investment in the unprofitable company (some of which can be attributed to acquisition costs).
The daily deals movement of 2009-2011 (RIP) spawned hundreds of baby Groupon clones, many of which raised money, and plenty more which didn’t need to. Why bother when you can purchase a “build your own Groupon” software package for the low price of $299?
Which is likely why a small player in Tampa, Crowdsavings.com, did not raise outside capital. The company is quickly changing its “small player” status with a ridiculous number of acquisitions. Which makes sense: The aftermath of the rapid rise and fall of the daily deals left many a zombie email list in its wake. Crowdsavings.com has not hesitated to capitalize on it. The Tampa-based company has purchased 15 companies since it launched in 2009, most recently in August buying Omaha-based DealGarden, operator of 60 daily deals sites, and Faveroo, a Columbus, Ohio-based company, in September. The company bought Muncheroo and BargainBee.com over the summer. Crowdsavings.com has said it plans to do several more acquisitions for the end of the year.
Today I stumbled upon an SEC filing that shows the company raised $2.24 million in new debt, likely to continue its acquisition streak of whatever daily deals carcasses remain scattered across the MidWest. The company had previously raised a $1.3 million round of debt.
Now in 32 markets, the company seems to be the last remaining startup clinging to the daily deals model. It’s either acquired all the rest, or they’ve fallen off the radar.
Groupon is flailing in its attempt to expand into mobile and, at the same time, become the “marketing dashboard” of choice for local businesses. Oh, and also compete with Square. Call it a pivot if public companies can do such a thing. LivingSocial, too, says it is looking to “move beyond” daily deals into comparable merchant services products. The company also opened some sort of community center.
Not Crowdsavings, which is merely refueling as it swallows lists of email addresses at bargain-basement prices in its quest to build a mini-daily deals empire.
[Illustration by Hallie Bateman with credit to wikimedia]
Erin Griffith covers New York startups for PandoDaily. She's worked as staff writer for Adweek and a private equity blogger for peHUB. Her writing has appeared in VCJ, Time Out New York, Huffington Post, FT.com, and BUST. She plays keyboard in a band called Team Genius and Tweets as @Eringriffith.
