Quo vadis Rebate Networks after DailyDeal sale to Google?
29. 10. 2011 § Leave a comment
I had interviewed Michael Brehm, CEO of Rebate Networks, back in February for Forbes Croatia and the EuroGeeks book. On hearing the news that Rebate had sold DailyDeal, their „DACH“ (Germany, Austria, Switzerland) group buying operation to Google, I asked him for a chance to catch up on Rebate’s development thus far, the Google deal and particularly plans for next steps.
We didn’t focus much on the deal itself, but previous reports, particularly Holger Schmidt’s Frankfurter Allgemeine online piece, had outlined it. According to Schmidt, the sale price was anywhere from 150 – 200 million USD, and Rebate Networks was reported to take a third of this amount, alongside the founding Heilemann brothers, the Insight Ventures VC fund and a smaller chunk to swiss Adinvest.
This wasn’t the first exit for Rebate. Just this June Rebate sold parts of their Asian network – Thailand, the Philippines and Indonesia – to US-based LivingSocial. At least part of this latter deal was an equity swap so Rebate now has a stake in LivingSocial.
Was there a specific strategy for selling these assets, I asked Michael when we spoke?
„In each of our properties we are working closely with the founders of that company who are always significant shareholders. Therefore, we evaluate every business opportunity carefuly. Regarding the Asian transaction, as well as the European one, the package in both cases was an attractive one, both for Rebate and for our partners in each of these cases. You could say that, rather than having a specific strategy for selling or holding on to assets, we go case by case.“
Now that they have a significant war chest courtesy of Google, can we expect Rebate to move aggresively into new markets where they are not present yet?
„The group buying model is by now very established and it’s difficult to build from scratch in any market. The global trend is for larger companies to grow through acquisitions. Although I wouldn’t exclude anything, our focus is primarily building and growing our business in the markets where we are already present. We are really happy about the way these markets are developing. The specific steps we might take depend largely on the circumstances in each market and on the judgment of our teams on the ground. We want to be quite careful with potential acquisitions – in general, we prefer to grow organically but, as I said, I wouldn’t exclude anything out of hand.“
The interwebs have seen a ton of discussions and commentaries on the best-known group buying company, Groupon, and their (so far) ill-fated preparations for an IPO, featuring – among other „interesting“ moments – the current owners taking 870 million USD into their collective pockets from previous investment rounds. I was curious to hear how a potential wave of negative sentiment towards group buying in general, sparked perhaps by the Groupon controversies, migh affect Rebate?
„We have been in the business for two years. All of our data shows that, overall, both the end customers and the merchants find this to be a very, very attractive value proposition. So – we don’t worry about the competition that much. From our point of view, if you deliver value to your employees, customers and merchants, you will succeed. Part of our mission, also, is education. There is a need to educate the markets and customers about how these relationships can work best.“
It’s going to be an exciting show following the next moves by Rebate. Those of us from Eastern Europe will be watching particularly closely, as Croatian-based Kolektiva, part of the Rebate family, continues to hold a strong leading position in Croatia, amongst dozens of other „Groupon clones“, but has also successfully expanded into 4 other regional markets: Slovenia, Serbia, Macedonia and Bulgaria, giving this „subnetwork“ within the Rebate portfolio a reach from Ljubljana in the West all the way to the Black sea in the East.
Fingers crossed for Michael, his partner Stefan Glaenzer and the whole global Rebate team!