I was just browsing through Daily Deal Media and came across an article about how venture capitalists are still interested in eCommerce site. The title grabbed my attention, and is mostly about how VCs are still throwing money at deal sites despite the post-IPO debacle of Groupon.
According to Daily Deal Media’s Megan Bildner,
“While private daily deal sites such as LivingSocial have suffered similar valuations declines, ongoing investment in e-commerce/flash sales seem to indicate that VCs view the daily deals business model, which primarily serves as a traffic driver for third-party businesses, in a different light compared to the e-commerce companies with actual consumer facing sales operations. Overall, the private e-commerce sector has continued to garner strong interest from investors looking to capitalize on the new breed of online retail companies looking to disrupt existing sales models or capitalize on large fragmented consumer industries.”
This is a good sign for companies running deal sites as well as anyone looking to get into the space.
Now, a quick item of note here is that Groupon is not sitting around twiddling its thumbs. Groupon is out aggressively making acquisitions in a bunch of different spaces, but that is doing little in the short-term for the share price. And as we at Daily Deal Builder have said for a few years now we still see the decline of the big players like Groupon to be a boon for the smaller, niche players in the deal space.
Would you invest in a daily deal site?
