Groupon Scoops Up Fashion Flash-Sale Site Ideeli for a Cool $43 Million
Groupon, home of the daily deal online, just got a pretty sweet deal.
Chicago-based Groupon bought fashion flash-sale site Ideeli for $43 million in cash, the companies announced on Monday. Launched in 2007 with millions of members, New York-based Ideeli has raised $107 million in venture capital funding since its founding, so being sold for less than half of that appears to be a loss for investors.
Ideeli sells clothes for men and women and home decor online at a discount. New categories of sales come online at noon EST each day. Competitors in the increasingly hot space include Rue La La and Gilt Group.
Groupon has already tested the waters beyond daily deals for restaurants, athletic classes and spa treatments -- its first areas of expertise -- into the merchandise sector, with the online retail store Groupon Goods.
"Our customers have a demonstrated appetite for these offers, and by broadening our reach in this space Groupon is even better positioned as the place you start when you want to do or buy just about anything, anytime, anywhere," says Groupon's new-ish CEO Eric Lefkofsky. Lefkofsky was brought on permanently in August, after a temporary stint at the helm after Groupon ousted its founder Andrew Mason in February.
Ideeli will continue to operate as its own website and will remain in its existing New York City-headquarters.
Catherine Clifford is senior entrepreneurship writer at CNBC. She was formerly a senior writer at Entrepreneur.com, the small business reporter at CNNMoney and an assistant in the New York bureau for CNN. Clifford attended Columbia University where she earned a bachelor's degree. She lives in Brooklyn, N.Y. You can follow her on Twitter at @CatClifford.