Top 5 ways Groupon IPO impacts Canada

As Groupon, and the industry, prepares for its upcoming IPO, we decided to put together a short list of ways this IPO would impact the Canadian Daily Deal industry.

1. If successful, this IPO leads the way for other top daily deal sites to follow suit. I see 3 scenarios in Canada where a Canadian Daily Deal site may follow the IPO gravy train:

– Dealfind: this is the obvious selection. They have already raised $31 million in funding, are one of the top 3 sites in Canada and are continuing to aggressively expand into the US. Further expansion and growth takes more rounds of financing and dealfind is not short on ambition. We have alsways stated to whomever would listen that Gary, Michael and the crew at Dealfind are looking to lead in North America. They would like the name Dealfind to be mentioned in the same sentence as Groupon, Living Social. Bloomspot, Gilt. An IPO for Dealfind is realistic down the road.

– Teambuy: They raised about $7 million and are looking to raise another round shortly in order to expand even further. Although Teambuy mentioned that they are looking to focus on the Canadian market only, if they get another round of funding there is only 2 ways that investors can get the return they are seeking, an IPO or a rather large buyout. An IPO makes sense but the only ways a buyout makes sense is if a large US daily deal site wants to come into Canada and establish themselves immediately, or if Groupon and Living Social want to further expand their presence in Canada or if a large media company in Canada wants to expand further into the daily deal industry; think Astral, Quebecor, Rogers, Trans Continental.

-Wagjag: Yes, a less obvious choice since it is owned by Torstar, but follow my logic: Torstar owns Wagjag, Jaunt.ca, and a healthy percentage of Tuango.ca. These brands are highly successful. Wagjag is the # 1 Canadian deal site across the country (Groupon is number 1 overall), Jaunt is the #1  travel deals site, and Tuango is so far ahead of its competition in Quebec it is almost laughable. As such, Torstar can decide to spin off the entire Daily Deal service and IPO that service. This strategy would probably make Torstar far more valuable and shareholders/equity owners of these daily deal sites far more money. So although this is a far fetched idea…I still like it, a lot.

2. With further IPO cash infusion, Groupon can actually invest back into Canada and make the experience far better than at the present moment:

-launch Groupon Now in other cities beside Toronto and Vancouver. Calgary, Edmonton, Ottawa and Montreal would love that service.

-Invest in Groupon Montreal, Quebec, meaning invest in providing French. Right now, Montrealers cannot use Groupon mobile…for some odd reason it is not available in English and certainly not in French.

 

3. If they invest funds into Canada, be it for customer service, sales or marketing, look for Groupon in Canada to outpace its competition even further. They are already number 1 by far, but in places like Quebec, well, perhaps they may even take the culture in Quebec more seriously and actually compete in that province against Tuango. Right now, they are in either 3rd, 4th or 5th place depending on the month.

4. Customer acquisition gets more expensive for other deal sites. With the amount of daily deal sites in the country (about 130) all bidding on the same keyword inventory on Google or yahoo or bing, customer acquisition gets very expensive. If Groupon uses some of its IPO cash to invest further in cpc marketing in Canada, look for keyword prices to be out of reach for smaller deal sites.

5. And the 5th way a Groupon IPO impacts Canada is……………uh……….it doesn’t impact the Canadian landscape at all, not one bit. The only thing it impacts is how much money Groupon receives and the competition in Canada could not care less, it is business as usual.

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