Groupon’s StarDeals in Australia has acquired the Melbourne-based group buying site Crowdmass. Crowdmass was founded by three high school friends, Tim Wu, David Wei and Ying Wang. The three went on to separate universities but remained friends and in 2009 won the Student Entrepreneurs IdeaPitch competition. In May 2010 they launched Crowdmass and as David Wei told News Hit at the time of their launch:
“We always wanted to start a business. We’re all pretty conscious with our bargaining and getting good deals ourselves, so we had a look around on the Internet to see what ideas there were. And we thought, how about using the power of bulk buying to get discounts.”
The three managed everything on the site including marketing, sales, site maintenance and customer service. They took in almost $40,000 on one of their very first deals. So it’s really no surprise that StarDeal’s managing director, Alexandra Podeanu, said the Crowdmass deal was “more a talent buyout than an acquisition.”
What does seem to be a surprise according to Sam Yip, a senior research manager at analyst firm Telsyte is that Groupon chose to acquire such a small company.
“It looks like Groupon is looking to acquire at the lower end of the market. Everyone expected their first acquisition to be a much bigger operator. Crowdmass is very small. They’re obviously looking to build their database.”
Podeanu said Groupon expected the market to consolidate in the next 12 months, but that acquisitions were not a priority for the US company.
“It is not our defined objective to acquire someone but you never say no,” she said. “Our plans are to grow organically. Crowdmass is more a talent buyout. We met with them, we liked them, we wanted them to join our team.”
Podeanu did not provide details of the Crowdmass buyout but when asked if Groupon would overtake current group buying market in Australia, she responded, “We are feeling very confident. Absolutely we want to be number one. This is what we will be fighting for everyday. I expect we will be a top three player by the end of the year.”
While Crowdmass founders, Tim Wu, David Wei and Ying Wang may have lost a company, it looks like they have gained a promising future with Groupon.