Groupon Buys CityDeal; Gains Access to 80 European Markets

Groupon, the pioneering deal-a-day provider, has used some of the proceeds of its recent $135 million round to buy CityDeal, a European imitator that has launched in 80 markets in 16 countries. The cost of the deal has not been disclosed, but CityDeal has raised $5.6 million. BIA/Kelsey notes that more than $284 million has been raised in the deal-a-day space altogether.

CityDeal, which will now carry the Groupon brand, was founded by The Samwer Brothers, who had previously launched a company that became the nucleus of eBay Europe. CityDeal reports that it has 600 employees, greatly increasing the size of Groupon’s own employee count, which is just over 200.

The acquisition of CityDeal greatly accelerates Groupon’s push to launch in as many markets as possible. It is currently in 59 U.S. markets and had earlier projected that it would be in 100 markets by the end of the year. Other deal-a-day providers in Europe include Groupalia, a Spanish company with sites in Madrid and Barcelona.

In a report on the deal-a-day space being issued this week for members of our Marketplaces program, BIA/Kelsey estimates that Groupon is poised to make $243 million this year from its 30 percent to 50 percent cut of deal-a-day offers; the addition of a second offer on many days in key markets; and the recent introduction of advertising.