Sydney-based group-buying firm Dealised has acquired Hong Kong-based company Localy Network Limited for an undisclosed sum, as Dealised seeks to drive its expansion across Asia.
Dealised, founded by start-up incubator Pollenizer, offers a group-buying technology services platform across 100 cities.
The platform began in 2009, powering industry giant Spreets, later acquired by Yahoo!7 for $40 million.
In September this year, Dealised announced it had raised $5 million in a Series A funding round led by Pollenizer, SingTel Innov8 and Yuuwa Capital.
SingTel Innov8 is the venture capital arm of Optus parent company SingTel, while Yuuwa Capital is a Perth-based venture capital firm.
At the time, Dealised said it would use its regional Asian headquarters in Singapore to drive global business expansion and develop mobile group-buying solutions.
It also announced the appointment of telecommunications veteran Jonathan Marchbank as CEO.
Marchbank has worked in the United States and Asia for the past 20 years, with both mobile operators and device manufacturers.
Now it’s been revealed Dealised has acquired Hong Kong-based Lokaly Network Limited, owner of group-buying services platform Lokaly and consumer group-buying site ValuUp.
While the financial terms of the deal remain undisclosed, the acquisition was completed through an equity deal. Marchbank described the acquisition as “part of the Asia growth story”.
“With this deal, Dealised now has a strong position in a fast-growing, sophisticated Asian market, a solid customer base and a strong team,” Marchbank said in a statement.
“The Hong Kong deals market is worth more than US$60 million and is growing. Our Hong Kong team will help us grow right across Asia.”
The Hong Kong consumer group-buying space is becoming increasingly competitive, with more than 30 companies now offering daily deals.
The market is estimated to generate revenues of US$60-70 million per year, while the total global group-buying market is tipped to be worth nearly US$4 billion dollars by 2015.
According to Dealised spokesperson Patrick Keenan, Asia holds “huge promise” for Australian companies, but points out that each market is unique and therefore needs to be handled with care.
“That relates to consumer behaviour and trust, corporate culture, internet and mobile penetration, payment systems, language, and on and on,” Patrick says.
“It can be a very long process to learn about each market.”
“In Dealised’s acquisition of LNL, their local knowledge was very important, while we brought global capabilities and resources, and an internationally proven business model. We think that is the way to go.”
Doug Aitken, a Hong Kong entrepreneur and co-founder of LNL, says by leveraging Dealised’s resources and expertise, LNL will continue to evolve the daily deal model.
“Dealised’s track record demonstrates the business model value,” Aitken says.
“Dealised is, after all, the company that helped its partners in Australia and Scandinavia dominate their respective markets, beating Groupon and LivingSocial.”
Pollenizer co-founder Mick Liubinskas described the deal as “another big step forward” for Dealised, commending its decision to avoid the ultra-competitive US market.
“Dealised has a very big presence in Europe and, through the investors at Innov8, there are big opportunities in Asia,” he says.
Dealised also announced the appointment of Jason Keiles as senior vice president of global business development. Keiles is the former vice president of business development for Getty Images.
Based in London, Keiles will be responsible for identifying and recruiting partners to use the Dealised platform, from turnkey solutions to customisable options.