9th May 2011. Stardeals, the recently formed Australian subsidiary of coupon giant Groupon, has acquired Crowdmass, a group buying site based in Melbourne, making this its first local acquisition. Terms have not been disclosed, although press speculation has put the deal at below A$1m. Groupon’s Australian CEO was described saying they paid only a “symbolic” amount to buy the site, with the acquisition being more about sourcing good employees than buying the company’s business assets.
Groupon launched in Australia as Stardeals because of Australian domain name “squatting” of the Groupon name by a competitor.
Following the acquisition, the Crowdmass team will start promoting Stardeals growth in Melbourne. It will also fuel the growth of the company all through Australia. Stardeals by Groupon started its operations in Australia on February 14, with first deals in Sydney, then Melbourne and followed closely by Brisbane, asides from offering a number of deals on a national basis.
Crowdmass was founded by three friends, Tim Wu, David Wei and Ying Wang, who knew each other since high school. Although they went to separate universities, the three remained very good friends and in 2009, they won the Students Entrepreneurs IdeaPitch competition. Crowdmass was launched in May 2010. During the launch, David Wei said that they all wanted to start a business and since they were conscious of their bargaining and good deals, they opted to use the ‘power of bulk buying to get discounts. Since its launch, the site has had a large following in Melbourne.
“We’re very pleased with what we have been able to do with Crowdmass in a relatively short time and with very limited capital,” Crowdmass co-founder David Wei said in a statement.
The trio managed the sites operation including sales, marketing, customer services and site maintenance. One of their very first deals earned them $40,000 and it was not a surprise that the managing director of Stardeals, Alexandra Podeanu called the acquisition a talent buyout.
Podeanu revealed that Groupon expectations was the consolidation of the market within the next year and that acquisitions were nit its first priorities. While she stated that acquisitions were not its defined objective, it could not say no to the offers from interested groups. She further stated that their plans are towards organic growth and when they meet Crowdmass, they liked them and wanted them to join the team at Stardeals.
While issuing the statement, she did not give out the details of the acquisition. However, when asked whether the group will overtake the group buying market in the country, she stated that their main objective is to be number one, and that’s what they are fighting for. Her expectations is that Groupon will be among the top three players come the end of the year.
David Wei stated that the offer from Stardeals is the perfect result for the three of them, as they will continue their involvement in an industry they are passionate about. They stated that their target is to achieve a bigger vision for Crowdmass.
People who purchased the deals via Crowdmass are still able to log in and access their unused vouchers at the site.