Betabeat has learned that Gilt Groupe is in the final stages of acquiring the troubled daily deal site BuyWithMe, which laid off more than half its staff last week to sweeten the deal for potential buyers. The sale is a win for Matrix Partners, who has invested in both firms, and been backing BuyWithMe across three rounds and $30 million in venture funding.
BuyWithMe will officially be part of Gilt starting Nov. 1. The remaining sales staff who were left after last week’s layoffs will be let go with one weeks pay. Gilt gets a lean company consisting largely of technology, a few executives, a large email list of customers and merchants partners in cities around the country.
Groupon is only days away from its big November 3rd IPO debut! Naturally, they are making crazy moves, as is Google, who wants to squash them and their stupid Groupon Cat into one of our planet’s inner-cores.
BuyWithMe wasn’t the only local company hemorrhaging jobs this week. Betabeat has learned that TheLadders laid off about 30 employees this week, across all departments.
“It was like Black Wednesday,” said the source of the overlapping job losses. However, where BuyWithMe let go of 55 percent of its staff, TheLadders downsizing was less severe, with seven percent of its 420 employees, according to our source who was familiar with the situation.
Until a month ago, TheLadders focused exclusively on the $100,000+ jobs market–its key differentiator in the market. The source said the layoffs were related to flat revenue growth at about $80 million, adding that the company’s two biggest expenses were people and marketing costs. “They already cut marketing significantly,” said the source, who called the job losses “cost cutting to reforecast budget due to lower than expected revenue growth.”
Here’s a little flash sales e-commerce history for you. Before there was Rue La La or One Kings Lane or even Gilt Groupe, there was Vente-Privee. And it’s headed for our shores.
The French startup just announced plans to launch a website in the U.S. by mid-November in partnership with American Express, reports Reuters. Of course the company, which was founded in 2001, will be entering a very different market than the one it started in, with both Amazon muscling its way into daily deals and the proliferation of discount fashion plays.
But that doesn’t seem to have dampened Vente-Privee’s ambitions. With American Express’s help, it aims to reach $500 million in sales in the next five years. Both Vente and Amex agreed to invest $15-20 million a piece in the joint venture.
What’s life like for Rob Deeming, Kevin Ryan’s “chief of staff” at Gilt Groupe? In a word: busy. The 33-year-old’s job centers around what seems like Gilt’s primary objective these days: launching new verticals as its core discount business matures and e-commerce competitors multiply.
In an interview with Mr. Deeming, a Brit with a Harvard MBA, The Street reports that the majority of Gilt growth comes from “a dizzying array” of new full-priced verticals, such as Jetsetter, Gilt Taste, and Park & Bond, which are expected to rake in $100 million combined within the next fiscal year. Gilt City, meanwhile, will account for 10 percent of overall revenue.
Dizzying seems like the right word to describe the pace. Mr. Deeming told the Street, “Now we plow through 100 ideas a week,”
THANK YOU GROUPON, FOR REMINDING US OF THE GLORY THAT IS GLASSDOOR.COM. Groupon, the all-star white-hot unstoppable brilliant daily deal startup that launched a thousand clones, is being sued by Chicago employees for abusive working conditions (think “sales staff cries all the time”). Nevermind that Groupon is the PointCast of 2011–”I don’t understand how everyone isn’t vomiting in their mouths over Groupon,” one exhausted founder told Betabeat a short time ago–let’s talk about GlassDoor. The all-anonymous, all-unverified rumormongering-est site of them all, a thorn in the side of employers who are forced to endure slander or pay GlassDoor to clean up their profiles, and a blight on our eyes as we navigate its rabbit hole-like interface in search of smack talk.
Co-founders Jerry Guo and Michael Waxman like to joke that Grouper is a Y Combinator-funded startup. That’s because they didn’t come up with the idea for Grouper–a social service that sets you and two friends up with three strangers based on your Facebook profile–until they got rejected from YC. “We took our $400 travel reimbursement check from YC and used that as seed capital for Grouper,” Mr. Guo told Betabeat via gChat.
Does that mean Grouper is a pivot?? “Lol,” he wrote, “It’s a completely new concept. We applied to YC with paperbuff.com. In the 36 hours before our interview, we ditched paperbuff and built qomments.com, were rejected, then decided to build a product people would actually want (*measured by charging for it).”
Indeed, Grouper, which just launched out of beta in New York today, was profitable after just 60 days.
Clicks no Mortar
New York based e-tailer ideeli was just picked as the fastest-growing company on Inc Magazine’s annual 500 List, with an eye popping three years sales growth of 40,882 percent. Of course, if you looked at Betabeat’s traffic growth since we started back in March, we could claim a pretty impressive 300,000 percent growth, but hey, it’s all relative. Since Silicon Alley is home to both ideeli and Gilt Groupe, which pioneered the online flash sale, we wanted to chat with ideeli CEO Paul Hurley and get his take on how this rapidly evolving industry will look a year from now.
A new fashion start-up launching in September has secured backing from some of the biggest names in angel investing on the East and West coasts. Edition01 has raised around $500,000 from David Tisch, Ken Lerer and Ron Conway’s SV Angel to build an e-commerce site focusing on capsule collections: limited edition runs of products by designers like Donna Karan, Calvin Klein and Narciso Rodriguez.
Just because Gilt Groupe decided to wade into the pedestrian business of local deals doesn’t mean it’s going down-market. Groupon can have its two-for-one bikini waxes and discount chiropractors. Gilt City will take the East Hamptons, thank you very much. Today Gilt City, which uses the company’s flash-sale model for local, luxury deals in cities like New York, L.A., and Tokyo, announced the Gilt City Hamptons House. From August 12th through Labor Day, the “exclusive summer oasis” will be offering “private” (to anyone willing to pay) events like dinner parties with celebrity chefs and film screenings.
Tickets for the 6,000-sq. ft. estate, complete with 45-foot pool, gym, and spa, are already on sale, including a pool party catered by Nobu, a fashion event with men’s designer Bonobos and yoga lessons with Russel Simmons.