It may seem like the group buying arena, especially in the U.S. and Canada, may be a little crowded; but with different sites solidifying their place in the space, TeamBuy.ca is definitely carving out its niche.
The team behind the Toronto-based group buying platform has decided to expand their offerings; past daily deals, and expanding their focus beyond Canada. TeamBuy recently acquired $5 million in financing from undisclosed investors, and plans to offer products for the home, children’s and infants’ items and a brand new travel category. TeamBuy.ca hopes that its website will be not just a destination for daily deals, but a hub for e-commerce in general, nudging it closer to the likes of Groupon and WagJag.
TeamBuy was founded by Edward Yao and Andrew Hutchings and launched in late 2009, and Ghassan Halazon joined them a short time afterwards, bringing with him investment banking knowledge from Citigroup in New York. The company raised $7 million in July 2011; leading them to become one of the most prominent group buying sites in Canada.
Ghassan Halazon is now TeamBuy’s chief executive officer, and describes the shift in strategy:
“As opposed to viewing us as a pull service, where typically Groupon and we, have sent you e-mail to push you to the site, we are moving towards being a destination where you can come to our site and find practically everything. The visits to the site are increasing on the organic side without having to come through e-mail, and without us having to show them content.”
As for the most recent round of financing, TeamBuy isn’t disclosing their investors, but does confess they had to look outside of Canada for the resources; noting that the “Canadian [venture capital] community is quite conservative compared to what we see on a global level, partly because they are consumed by a lot of negativity in the media around the space”.
Negativity in the media is plenty, but exposure can also bring positivity to group buying sites; as TeamBuy experienced when they were featured on Dragons’ Den, a popular Canadian Television show on which business owners pitch ideas and concepts to a panel of investors, hoping to get seed money to fund their venture. Halazon said the appearance raised the company’s profile and caught the attention of investors who were more familiar with the group buying market.
“A lot of small players are falling off because of lack of access to capital, technology and depth in content. In terms of consolidation, we are seeing smaller types drop off, although nothing material. In terms of the bigger guys, you look at the landscape; you have Groupon, a few media companies doing interesting stuff, Dealfind and ourselves.” Halazon said.
He continues: “In many ways, TeamBuy is the largest independent player that exists, not having been a previous business that pivoted into this or having media support. If we look [out] six months to a year, it will be more and more apparent – there will be few players – [but] there is quite enough to go around on the local side and certainly enough to go around on the product side, where inventory is unlimited around the world.”
Source: The Globe and Mail