In the European daily deals space today, everybody is looking closely at Living Social’s fast external growth, particularly with the recent acquisition of the French high-end player Dealissime, and Barcelona-based Letsbonus last January in order to enter Spain, Portugal, and Italy.However, Lookingo—the Smartbox group buying company that just raised $3.4M—still seems to be the most serious challenger for Groupon, and here is why.
Founded by Pierre-Edouard Sterin in 2003, Smartbox is a global leader in gift cards. The company generates $666 million in revenues, and records 1,100 employees with a global footprint in 19 countries. Ouffer is an Australian group buying website created by two young American entrepreneurs, Anton Bernstein and Joshua David, while still living in the U.S.
In October 2010, Smartbox bought out Ouffer and lauched Lookingo with the two founders as CEOs.
This venture (the team still owns significant amount of capital) is now #2 group buying player in France with 80 employees, 1 million subscribers in the top 10 French cities (Groupon is claiming 5 million members in the country), around 1.5 million unique visitors to the site, and an expected $28 million revenues in 2011.
For two main reasons at least, one might believe Smartbox-Lookingo is likely to win position #2 of the European market.
First because of its synergies with Smart&co (holding includes Smart&co Ventures and Smartbox Group, see later on) and second, the great vision of the team on the concept, with smart work on the value proposition for both customers and local businesses.
With an investment structure and leading European websites focused in the leisure-distribution-travel market, Smart&co Group provides a perfect ecosystem for Lookingo in order to become a tremendous player in the Group Buying Industry:
- Funding: Smart&co Ventures invested $3.5M to back the launch of the website and led the second round of funding, which included Nexicap Partners.
- Sourcing: Lookingo is leveraging the existing relations of the group with local businesses to optimise their deals-sourcing strategy. With websites such as La Fourchette (a leading online booking platform and management software provider for more than 7,500 restaurants in France & Spain), Weekendesk (online travel agency specialised in thematic short-breaks) and Balinea (online SPA reservation service & discount coupons), it is not a surprise that the quality of Lookingo deals is much better than the competition.
- Emailing Database: The group-buying website is using the Smart&co email base (2,5M members) to recruit customers. By co-branding deals with La Fourchette (see here) and Weekendesk, Lookingo is creating a solid brand and clearly makes the most of the Group synergies.
- International implantation: Not only is Smartbox able to help Lookingo succeed in France, it has the means to make them a strong European player. With Smartbox having local offices in more than 12 European countries, the daily deal website is well positioned to build the right team in order to expand rapidly and effectively.
Lookingo was not a first-mover. It certainly won’t be able to catch up with Groupon, but it learned a lot from the company in order to propose an evolution to the concept to consumers and businesses. On the consumer side, they redesigned the concept, laying emphasis on pictures and deal descriptions (see image).
In terms of after-sales service and community management, they are certainly showing the best level of proximity with their members, backed by a strong Facebook community of more than 80,000 members (though people are casting doubts on how they created this FB community—see image here).
On the small business side, after the bad Groupon buzz due to an unexpected large number of customers and poor quality of service, Lookingo immediately put limits on its offers, constantly assuring its customers that they will have the same experience as non-coupon customers.
Last but not least, as with the other players in France, Lookingo is around 30 per cent in terms of deals margins, which is lower than Groupon’s per cent.
The European daily deals market is maturing in Europe, and a lot of opportunities are still ahead of the group buying players on the continent: customers’ acquisition, international expansion, publishers.
There is no doubt that Lookingo is well positioned to take up these challenges and prove they are the ones Groupon should fear.