Investor enthusiasm for online retailing has reached a new high after James Packer and other investors sank $80 million into Catch of the Day and Scoopon, valuing the company at $200 million.
Australian online deal pioneers Gabby and Hezi Leibovich, founders of Catch of the Day and group buying offshoot Scoopon, have secured an $80 million investment from James Packer's Consolidated Press Holdings, Seek co-founder Andrew Bassat, New York based hedge fund Tiger Global and Glenn Poswell founder of Gannet Capital.
The Leibovich brothers will retain a controlling stake in the group businesses, with Lee Fixel from Tiger Global and Jason Lenga from Seek joining the board.
The funding values the company at $200 million and signals the swift move into consolidation phase of the group buying space, which hit Australia with viral gusto just over 12 months ago.
The size of the deal also eclipses the acquisition price of rival Spreets, which was acquired by Yahoo!7 in January for $40 million.
For Packer this is the third investment foray into on line retailing via his various interests. NineMSN launched dominant coupon player Cudo in August, while last month Packer’s Ellerston Capital, took a “minority cornerstone” investment, believed to be $10 million in the online retailing site DealsDirect.com.au.
Packer said he was attracted to the Leibovich’s assets because “unlike many other players in the market, the team’s proven experience in building profitable e-commerce businesses, means they have the skills, supplier networks and economies of scale to keep growing and leading the market.”
Catch of the Day, featuring the best online bargain of the day, was one of the earliest online deal sites to emerge in the Australian market, launching five years ago. They moved into group buying with Scoopon.com.au in 2010 and leveraged off their existing online following.
Leibovich claims that despite the rapid growth in the daily deals sector, etailing is still in its infancy when compared to international markets.
“It is still early days in Australia when it comes to online retail and to support our next phase of growth we were open to overseas investors who could share a different perspective into the online retail market, as well as bring new skills, advice and contacts to further our growth and expansion.
The funding will be devoted to developing the company’s expansion into new locations with a focus on more localised deals, the introduction of specialised offerings and continued investment in technology, including a strong push into mobile applications.
- Australian manufacturers can create their own stimulus
- Here’s what separates success from the rest
By Adam Zuchetti
- 5 workplace trends to watch in 2020
By Nicole Gorton