Groupon Acquires iFund-Backed Pelago; Founder to Head Up Product Development

Groupon has acquired Pelago, the makers of a mobile application called Whrrl that allows people to check in to locations and discover new restaurants and local businesses. As part of the acquisition, the company’s founder Jeff Holden will oversee Groupon’s product development.

The announcement was scheduled to be made this afternoon on Groupon’s blog.

Terms of the deal were not disclosed, but Groupon’s Andrew Mason wrote: “We’ve always liked CEO Jeff Holden, the Whrrl team and the technology they’ve developed. Their obsession with real-world serendipitous discovery, or Anti-Search, is core to Groupon’s mission. It’s about discovering what you didn’t know you didn’t know, right in your own backyard.”

Founded in 2006, Seattle-based Pelago has raised money from Kleiner Perkins Caufield & Byers, including its iFund, Bezos Expeditions, T-Venture (T-Mobile’s venture arm), Trilogy Equity Partners and Reliance Technology Ventures. The company’s mobile application called Whrrl missed its calling with other companies, such as Loopt, Gowala and Foursquare doing a much better job of getting consumers to adopt their check-in services.

The company was founded by Holden, who prior to starting Pelago, spent more than eight years at Amazon.com. He was most recently SVP in charge of Consumer Websites, Worldwide, where he oversaw the end-to-end consumer experience including search, navigation, personalization, social computing, ordering, merchandising and automated email.

As part of the acquisition, Holden will oversee Groupon’s product development and many of Pelago’s people will take integral roles in future “Grouponnovations,” according to Groupon’s Mason. However, Whrrl will not live on and will be ending on April 30. Holden confirmed to us that he will be moving to Chicago.

The acquisition will give Groupon an injection of Amazon’s culture, which its nearest competitor, LivingSocial, has already received through an investment by the e-commerce giant.

Of course, Groupon has plenty of money to acquire talent through acquisitions since it recently raised nearly $1 billion in capital.


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik