Yahoo!7 acquires Spreets for $40m
Thursday, January 20, 2011/
Yahoo!7 has acquired Australian group-buying site Spreets in a $40 million deal, despite the start-up only launching in April last year.
Spreets, the first group-buying site in Australia and New Zealand, has half a million members, with more than 274,000 vouchers purchased since its launch.
Dean McEvoy created Spreets in March last year, but didn’t receive its $2 million in funding from investor Klaus Hommels until April.
It was later picked up by Australian incubator Pollenizer, which provided the launchpad for the business.
Mick Liubinskas, co-founder of Pollenizer, told StartupSmart: “It’s wonderful recognition of the start-up industry here in Australia and within the business sector generally.
“There was great promise to build an Australian group buying site. We did $4000 in our first month and $4 million in the last month. People may look at the Spreets model and say it is easy, but there has been a lot of hard work under the bonnet.
“The acquisition of Spreets should let all entrepreneurs know what is possible in Australia. The group buying space is heating up. From a timing perspective, Yahoo is ready to really get into group buying and make the most of it.
“Yahoo and Pollenizer have an existing relationship in the sense that it is interested in the start-up scene and innovation. Yahoo also has a huge media advantage; they are a great conduit to customers and have a good, broad array of categories.
“[I would advise start-ups] to get started quickly – we launched in 32 days. You can have products and business plans, but you really need to just get out and do it. If you’ve got the right people and are focused on what you’re doing, anything is possible.”
Phil Morle, fellow Pollinizer co-founder, adds: “It’s wonderful for us to pass the flame onto Yahoo at this stage. They will be able to take that growth level and make Spreets enormous.”
“Spreets is proof of a really healthy start-up ecosystem here in Australia. I encourage other people with a dream of building their own thing to use it as an excuse to go and do it themselves.”
Yahoo!7 says it will bring a new audience to the Spreets site through distribution on the Yahoo!7 Network as well as access to the benefits provided in Australia and New Zealand through its joint venture partners Yahoo! Inc. and the Seven Media Group, including marketing and promotions.
Yahoo!7 chief executive Rohan Lund describes Spreets as a “market leader” in what is becoming an increasingly competitive and fast-paced market.
“The Spreets management team in [chief executive] Dean McEvoy and Justus Hammer come with strong expertise and experience in the Australian group buying market,” Lund says.
“At its core, Spreets is about leveraging insights to deliver the best local deals through an online social experience, and this maps perfectly to the Yahoo!7 local and social strategies.”
“The acquisition of Spreets means we can bring the best of Yahoo!7 to grow the business even further.”
Lund told SmartCompany: “(Spreets) will sit independently from Yahoo!7. It’ll have access to all Seven and Yahoo’s resources, it can grow as fast as it possibly can. The CEO of that business will report directly to me, and Dean will report it to me. If it ain’t broke, don’t fix it.”
“On our front page (of Yahoo!7) you’ll see the offers, pushing them to users around the ntwork. One thing we’re good at it selecting insights from users and knowing what matters most to people. We’ll be able to help expand that network and find people who are interested in that.”
“The Seven group is very good at building brands. Everyone will know the name Spreets.”
According to McEvoy, the group buying model has rapidly evolved over the past year, delivering cost-effective marketing to small businesses and addressing an unmet and growing demand from consumers for online coupon deals.
“Australians and Kiwis love an amazing deal and Spreets has seen significant growth delivering over $40 million in savings to consumers over the past year,” he says.
“We’re proud to be an Australian-born company leading the market in this rapidly evolving space.”
“We’re thrilled with the acquisition by Yahoo!7 as we see the huge potential that one of Australia’s leading online media companies, which has huge momentum in the market, will bring to the Spreets business.”