Daily Daze

After Big Layoffs, BuyWithMe Being Acquired By Gilt Groupe, Slashes More Staff

What a bargain!

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. Read More

Buy Together Die Together

The Full Story Behind BuyWithMe’s Big Layoffs: Debts Come Due For Daily Deal Industry

One kind of pink slip can lead to another

Betabeat has been covering the layoffs at BuyWithMe since Wednesday, when more than half the staff, at least 100 people,  were laid off without warning or severance. There has been almost no word from the company or its management. As a result, we’ve had to rely mostly on anonymous sources who know bits and pieces. But over the last 24 hours, we’ve been able to put together some big pieces of the puzzle.

The statement released yesterday by CEO James Crowley, that the company was reorganizing to best serve its clients and customers, was disingenuous at best.  Numerous sources Betabeat spoke with confirmed that BuyWithMe is looking to be acquired by a larger player in the daily deal space, and has been for some time now. The layoffs were intended to make it a more attractive purchase.

How did BuyWithMe end up in such dire straights? Betabeat has heard from a source that not only did the company purchase six smaller startups in the last six months, burning through some of its capital, but it also took out a $10 million debt round from its backers that was never disclosed to the press. That goes a long way towards explaining how the company got to where it is today. Read More

Daily Daze

Canned BuyWithMe Employee Says Company Died Because It Got Greedy

UPDATE: A source familiar with the situation says BuyWithMe founder Andrew Moss based layoffs on a list of employees he liked and didn’t like.

An employee of BuyWithMe who was laid off today, along with what he estimates to be about 55 percent of the staff, says the company went under because it got greedy.

“They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn’t be in this kind of trouble.”

This employee says there is no hope of raising a round now and that the company is looking for a buyer. “They are hoping to just sell and get some of the value back.” Read More

Group Buying Mania

New Data From Groupon Confirms It’s Peaked in Older Markets

coupons

Bad news for group buying from local daily deal aggregator  and number-cruncher Yipit. Following on some earlier analysis based on the start-up’s S-1 filing, the initial paperwork required for an IPO, Yipit finds that Groupon’s numbers are getting worse with time. In Boston, the company’s second-oldest market, subscribers are buying fewer Groupons and revenue per merchant is waning, Yipit’s Vinicius Vicanti writes. As Groupon spends more to acquire new customers, its subscriber base is buying fewer Groupons. “That’s not good,” is Mr. Vicanti’s kicker. Read More