BuyWithMe Likely to Raise More Cash as Competitors Pull Ahead
BuyWithMe confirmed today that its CEO, Cheryl Rosner, has left the company after only eight months on the job.
To get the skinny, we caught up with the company’s Interim president, David Wolfe, who was promoted from chief product officer as the company seeks a new leader. Wolfe would not elaborate beyond echoing the company’s statement that the decision for Rosner to leave was mutual.
However, Rosner’s departure hints at how nascent the market for daily deals and social/group buying is, and how there’s still work to be done to figure out the economics.
The year-and-a-half old Groupon competitor is no exception. If you aren’t familiar, BuyWithMe is often considered the third- or fourth-largest outfit in the group-buying space. The company, which recently moved to New York City from Boston, operates in 12 markets, and has raised $21 million in venture capital. It has 93 employees.
Wolfe acknowledges that a hiring spree is necessary to catch up to its nearest rivals, Groupon and LivingSocial, and that it will likely need more capital to continue its aggressive expansion plans. “The intent will be to raise more money; it’s a probable event,” he said.
As it is, BuyWithMe will likely miss this year’s goal of being in 15 markets by at least one. But generally, Wolfe says, that’s not the problem: “We are taking a step back. What is most important is for our emerging markets to grow to maturity, and for us to push them over the hump and increase our market share.”
Right now, he claims, BuyWithMe’s best performing market is its first: Boston. Trailing close behind is New York City and Washington, D.C., but the other nine are struggling to have a deal every day. “They are performing as expected, given the focus level and resource level we’ve given them….It’s less that we stumbled strategically, but we really spread ourselves too thin to get into multiple markets, and now we are focusing on making sure we are providing great service.”
Wolfe acknowledges the competition by saying it’s a hard space to build brand loyalty. Consumers will gravitate to the best deal every time, so they are focusing on creating loyalty with merchants. “Our focus is on making sure we are delivering an amazing service to our merchants and consumers. A lot of people have jumped into the game, and it’s a challenging business. It’s not a small feat to deliver [deals] on a consistent basis.”
Does Wolfe believe there’s room for more growth in the market–beyond the successes of Groupon and LivingSocial?
His answer is yes. “I don’t think even with Groupon’s amazing execution that we are even close. We see a lot of blue ocean and a lot of untapped eyeballs on the consumer side across a lot of locations. The excitement over the past couple of months is not the end stage. We are seeing first innings, where a transformational shift is occurring on how retailers reach consumers. That’s fundamental.”