When I joined Half Off Depot back in May I started looking around for a competitive target. Not the 800 pound gorilla Groupon LivingSocial type of competitive target. A smaller yet significant company that we could set our sights on. That company was BuyWithMe.
As best as I could tell BuyWithMe was the number three player at the time. Founded in Boston, based out of NYC, BuyWithMe was actviely operating in a dozen or so major markets. They had raised $21.5 million from Matrix Capital and Bain Capital. The kind of number that makes our $7 million seem small.
And BuyWithMe was on a tear. The online deal market is going to consolidate and BuyWithMe was playing the role of consolidator, something that I would like to do. In 2011 they acquired six competitors, the most recent being in September. Then the wheels fell off.
Just six weeks after its last acquistion BuyWithMe choked on them. BuyWithMe laid off half its workforce after reportedly failing to close a new round at a $500 million valuation. It was reported to be looking for a buyer.
That buyer was Gilt Groupe, who purchased the assets of BuyWithMe. Asset purchases are rarely good for the selling entity. Gilt did not hire many of the BuyWithMe staff. The purchase price was about $5 million in cash and stock. Somebody pulled the plug.