Seed Stage Slaughter

Scoop St. Sidesteps Tough Funding Market, Acquired by BuyWithMe

justin Scoop St. Sidesteps Tough Funding Market, Acquired by BuyWithMe

Scoop St. Co-founder Justin Tsang.

BuyWithMe, “a daily deal contender” or “Groupon clone,” depending on who’s doing the talking, announced last night that it acquired its fifth company this year. This time they plunked down cash for Scoop St., which took a hyper-local approach to discounted deals, focusing only in New York City. AllThingsD reports that the terms of the deal weren’t discussed, beyond the fact that it was all-cash, but considering Scoop St. just announced its own branded mobile app earlier this month along with a new lottery feature, it probably wasn’t in the works for that long.

A recent report from the 451 Group found that acquisitions were up in the suffocatingly crowded deals space, but the Scoop St. buyout is also another indicator of the impending seed stage slaughter we’ve been trying to warn you about, as the early stage funding banked in the heady days of 2010 runs out.

Scoop St. co-founder David Ambrose said its investors, who plunked down $1.2 million, saw a “good return”, and that the company actually had enough capital to last until the end of the year. BuyWithMe’s offer came just as he was beginning to seek more funding. Mr. Ambrose called the deal the “perfect fit” since both start-ups were made in New York and launched in 2009, although BuyWithMe now operates in 13 markets. The acquisition means BuyWithMe just picked up Scoop St.’s eight employees, a subscriber list of 50,000 and the code for location-based features.

Said Mr. Ambrose:

“We learned a lot as entrepreneurs in a really hot market and watched how companies have gotten started, and how some have been successful and raised a lot of money, and how others folded. We are still really bullish about the space…It made perfect sense for us.”

Scoop St. will offer customer support for already purchased vouchers until Monday, September 12th. But after that, you’re gonna have to call BuyWithMe.

Follow Nitasha Tiku on Twitter or via RSS. ntiku@observer.com