A day after it announced raising $950 million (Rs 4,294 crore), online seller of discount coupons Groupon Inc. said it has bought three Web-based firms including Kolkata-based SoSasta.com as it expands globally.
Groupon and Friday Media Pvt. Ltd, promoter of SoSasta, were in talks since September and the deal was sealed on Sunday, according to Ananya Bubna, chief executive of Friday Media. Bubna is now managing director Groupon in India.
“India currently has 75 to 100 million Internet users and that’s a huge market,” said Bubna, referring to US-based Groupon’s interest in the country.
“E-commerce has hit an inflection point where it’s just about taking off. In the (past) couple of years, we have seen huge activities in travel portals and all the other wards are catching up as well, so this is really a good time for Groupon to enter the market.”
He declined to unveil the value and the terms of the deal, but said Friday Media will remain a minority stakeholder. Bubna added that the company is yet to decide on whether to re-brand the SoSasta website as Groupon.
“Re-branding Groupon is the way going forward, but we are also looking at what makes sense for India,” he said.
With the SoSasta deal, Groupon has entered India’s fledgling yet promising online discount coupon market. While there is no data available for the business segment, the country has an addressable overall electronic commerce market of around $50 billion, according to Amitabh Saran, chief executive of Buzzintown.com, which operates in the same space.
“We welcome new players in the market, especially large global ones, because it is further validation of the fact that there is a strong market which is growing very fast,” said Kunal Bahl, chief executive of rival Snapdeal.com.
Bahl said Indians spend around $100 billion a year on discretionary retail services. “If you were to migrate even 2% of those spends online, it’s a $2 billion market,” he said.
Groupon on Tuesday announced buying similar firms in Israel and South Africa.
On Monday, Groupon said it has raised $950 million from backers including Mail.Ru Group and venture capital firms of Andreessen Horowitz and Kleiner Perkins Caufield and Byers.
Launched in 2008, Chicago-based Groupon offers discounted deals in retailing and entertainment in 35 countries. Groupon has been in news in recent months as it turned down a $6 billion acquisition offer from Google Inc.