Catch of the Day, Scoopon secure $80m investment – StartupSmart
Daily deals site Catch of the Day and its group-buying subsidiary Scoopon have secured an $80 million investment from a high-profile consortium including media mogul James Packer and Andrew Bassat, the co-founder of Seek.
The investment, which values the group at $200 million, also involves Glenn Poswell, founder of Sydney-based asset management company Gannet Capital, and American hedge fund Tiger Global Management.
Bassat is involved separately from his role at Seek, while Packer invested via his Consolidated Press Holdings vehicle.
Catch of the Day was launched in 2006 and followed up with the launch of Scoopon in 2010. Despite being just five years old, Catch of the Day attracts 150,000 visitors a day, currently turning over about $100 million.
Founders and brothers Gabby and Hezi Leibovich will own a controlling stake in the company, but Tiger’s Lee Fixel and Seek’s Jason Lenga will join the board.
Gabby Leibovich says despite the growth in the daily deals sector, Australia’s online retailing industry is still in its infancy when compared to other markets, which is one reason why he and his brother considered investment from international partners.
Scoopon is the last major group buying site in Australia to receive funding; Spreets, Jump On It and Cudo were either provided funding or launched by media companies.
Gabby Leibovich says: “We’ve established ourselves as leaders in this space without any money and we’ve been profitable. [The investors have] given us a suitcase full of cash and we’re going to use it to become the undisputed market leader.”
Investors say they were attracted to the company’s scope and the founders’ knowledge of the current retail environment.
“What was immediately apparent when we started discussions with the Leibovich brothers was their deep understanding of the space and what was required to build a globally competitive eCommerce group,” Fixel said in a statement.
James Packer said: “Unlike many other players in the market, the team’s proven experience in building profitable eCommerce businesses means they have the skills, supplier networks and economies of scale to keep growing and leading the market.”
The company said the investment would be used to fuel the company’s “continued leadership” in the sector, as well as supporting its expansion into new locations, with a focus on more localised deals, specialised offerings and continued investment in technology, including mobile applications.
However, the investment also brings with it some legal troubles. Scoopon is currently being sued by Groupon for registering the Groupon trademark and Groupon.com.au URL, and a case is set to be heard in the Melbourne Federal Court in August.