Packer tipped to pour $40m into Catch of the Day

James Packer is reportedly planning to pour $40 million into daily deals and group buying site Catch of the Day, suggesting tech companies are the current flavour for large investors.

 

It’s believed Packer has valued Catch of the Day at $200 million, with a deal expected to be finalised by the end of next week.

 

The rumour comes just weeks after Packer’s investment vehicle Ellerston Capital invested in online retailer Deals Direct, reportedly purchasing a third of the business for $10 million.

 

Catch of the Day was launched in 2006 by brothers Gabby and Hezi Leibovich, and currently brings in $100 million of revenue every year. The brothers declined to comment on the reported deal.

 

The site provides a solution for large distributors and retailers to regularly dispose of end-of-line and clearance items, and sells up to 10,000 items a day.

 

Meanwhile, sister site Scoopon is the industry leader in the group buying market followed by Spreets, which was recently acquired by Yahoo!7 for $40 million.

 

Packer’s investment would come during a difficult time for the company, as Catch of the Day is currently embroiled in a legal battle with group buying giant Groupon, which claims the company has misled users after it registered the Groupon trademark and Groupon.com.au domain.

 

The Leibovich brothers registered the Groupon name in Australia in a bid to keep its US rival out of the market, and recently knocked back a $185,000 offer from Groupon to purchase the name.

 

Sam Yip, senior research manager at analyst firm Telsyte, believes Scoopon will now be a target for acquirers, particularly as Groupon and Scoopon face off in court.

 

“We’re at the point now where winning small players won’t get you to number one, and Scoopon seems to be the last target,” Yip says.

 

The rumoured move by Packer comes after a number of Australian tech companies attracted significant investment interest from overseas.

 

Within the past year, Silicon Valley firm Accel Partners has invested in Atlassian, OzForex and 99Designs, and last week Electronic Arts purchased Melbourne game studio Firemint.

 

Mick Liubinskas of tech seed fund Pollenizer told StartupSmart earlier this year that Australia is only scratching the surface around eCommerce, and companies like Accel are looking for fast-growth investments.

 

“Companies like Accel are very keen on Australia because it is seen as a fast-growing industry that can produce global winners,” he says.

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