As Competitors Plan IPOs, Boston-Based BuyWithMe Plots Expansion
BOSTON (CBS) – As BuyWithMe’s larger group-buying competitors Groupon and LivingSocial pursue initial public offerings, the company is rapidly expanding its footprint in Boston and around the U.S. in its bid to close the gap with the leaders, CEO Jim Crowley said in an interview.
BuyWithMe, the No. 3 daily deal site nationally and the second-largest in Boston, has grown to a staff of 60 in Boston from 20 last December, Crowley said. And the company expects to hire another 40 in the city by the end of the year, following the move to a larger office on Boylston Street a week ago, he said. BuyWithMe is jointly headquartered in Boston and New York City, and currently employs 175 overall.
Boston Business Journal’s Kyle Alspach reports
Founded in Boston in late 2009, BuyWithMe doesn’t appear dramatically different from Groupon or LivingSocial to consumers, but Crowley said participating merchants notice a difference. For instance, BuyWithMe pays the merchants who take part in deals within 14 days of the deal close, Crowley said.
BuyWithMe also works hard to make the deal a collaborative process for the merchant, “as opposed to dictating to the merchant what it’s going to be,” he said. “We do think we tend to bring a heightened merchant-centric ethos to our business practices,” Crowley said.
BuyWithMe is currently offering deals in 15 cities, and expects to reach as many as 21 by the end of the year, Crowley said, though he declined to give specifics. The company has a “number of announcements” planned for the next several weeks, he said.
BuyWithMe has acquired three other deal sites since March — LocalTwist of San Carlos, Calif., DealADayOnline of Chicago and Group Swoop of San Francisco. And on Tuesday, BuyWithMe announced a partnership that will allow users of the newest Foursquare app to access BuyWithMe deals through the location-based app.
Crowley, former chief executive of Turbine Inc. who took over as BuyWithMe’s CEO in January, declined to discuss the possibility of further acquisitions or additional venture capital. The company has raised $21.5 million to date, from backers including Matrix Partners of Waltham, Mass., and Bain Capital Ventures of Boston, with the latest round raised a year ago.
The growth at BuyWithMe comes as the frontrunner in the space, Groupon, awaits the right moment for its IPO. The Chicago-based company in June filed its intentions to go public, and some have suggested the company’s valuation could reach $30 billion.
Meanwhile, reports surfaced last week that LivingSocial has chosen lead underwriters for an IPO, though there hasn’t been a formal announcement. The Washington-based company is reportedly expecting a valuation of $10 billion to $15 billion.
BuyWithMe isn’t eyeing an IPO now, with the company focused on expansion, Crowley said. “But great companies have great opportunities, and if we end up filing an S1 (registration for an IPO), that would be great,” he said.
In May, BuyWithMe offered 675 deals nationally, according to Yipit, a deal aggregator. That put the company far behind Groupon (4,534) and LivingSocial (1,932), but well ahead of fourth-place Gilt City (345). LivingSocial easily had the fastest monthly growth in deals among the sites, with 59.1 percent growth, ahead of both Groupon (17.9 percent) and BuyWithMe (13.4 percent).
In Boston, however, BuyWithMe currently has the second-largest market share, with 157 deals to LivingSocial’s 151 over the past 60 days, according to Yipit. Groupon had 387 Boston deals during that period.
After outgrowing its space at 883 Boylston St., BuyWithMe moved to a new Boston headquarters at 745 Boylston St., Crowley said. “We were completely out of space, sitting on top of each other,” he said.
Crowley said the new space will be large enough to handle the expansion of the Boston staff to 100 in coming months. BuyWithMe expects to reach a total headcount of 260 or 270 by year’s end, he said.