We’re fascinated with Groupon, the group-buying site based in Chicago that gives you tremendous deals on stuff. Evidently, we’re not alone.Groupon easily raised money at a monster valuation. Groupon clones have started popping up right and left, also raising tons of money, and even group deal aggregators and more aggregators.
Jérémie Berrebi, serial entrepreneur based in Paris and Israel and partner at Kima Ventures, for one, has had enough. Kima Ventures is the new international seed fund that plans to invest in 100 startups over the next 2 years. Kima’s other founding partner is Xavier Niel, the self-made billionaire founder of Iliad/Free, France’s leading ISP.
Give his status as a first-tier international seed investor, few people have the global perspective on startup trends that Berrebi has. And he’s fed up with Groupon clones. Here’s what he writes on his blog (in French): “We’ve had more than a dozen intros to Groupon clones in France alone. … We will invest in none of them. The market is saturated before it’s born.”
So there you have it, folks. We still believe that Groupon is cheap and that group-buying is definitely a great, sustainable business, but we agree that there will definitely be a shakeout in the sector in the coming years.
Berrebi writes further: “Large e-commerce actors will also get into the market with large qualified databases of users.” He’s probably right. The strength and the weakness of the Groupon model is that it is very much based on email and so the business can be replicated by someone who already has a strong opt-in commerce mailing list. Both Vente Privée in France and Gilt Groupe in the US have dabbled in grouponing. We’re thinking it might interest PriceMinister.com, which recently displaced Amazon as the #1 e-commerce site in France and might be looking to boost its growth ahead of an IPO. We’re also curious to see what large US e-commerce actors in this space will try.
In any case, here’s the first big needle pricking the Groupon clone bubble.