Groupon has acquired New York based online retail site, Ideeli as revealed from a company blog post. It was an all cash deal for an amount of USD 43 Mn. Post acquisition, Ideeli will continue its operations in New York as an independent site.
Founded in 2007, Ideeli is known as a flash sales company which specializes in fast, daily deal events and offers heavily discounted fashion apparels in limited supply. The concept, however, fad off in time being because of difficulties in maintaining inventory and in offering large volume deals.
The deal is a part of Groupon’s latest strategy of revamping its daily deals business into more focused segments. Wherein, with this deal, Ideeli could get some advantage in cutting down its customer acquisition costs, Groupon will get benefit of the Ideeli’s expertise in fashion segment.
“Ideeli extends our fashion presence and brings great relationships with many of the top brands in apparel. Our customers have a demonstrated appetite for these offers, and by broadening our reach in this space Groupon is even better positioned”, said Groupon CEO Eric Lefkofsky.
However, as per the analysts, ideeli is unprofitable, so that will dilute Groupon’s profit margins.
Ideeli, currently offers curated selection of offerings across the apparel, accessories, home, and lifestyle categories. Each limited-time sale event offers privileged prices on the best brands and experiences with most sale events starting at noon ET and lasting only 40 hours.
The company claims to has over 5 million members across the United States and provides international shipping to 50+ countries including India. Also, it had raised $107 million in funding from investors like StarVest, Kodiak and Credit Suisse since being founded in 2007.
Groupon’s other acquisitions included hotel booking app Blink and Korea based eCommerce company, Ticket Monster. Also, it recently added up restaurant reservation along-with daily deals to its offerings and launched gadgets microsite with Croma.
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