The recent acquisition of VoucherCodes.co.uk by WhaleSharkMedia could be an astute move by the US venture capital group to build a powerful rival to Groupon in Europe, according to Doug Scott, founder of DiscountVouchers.co.uk
Voucher sites have their main value in the email subscriber database and clearly, with four million subscribers, VoucherCodes.co.uk is a valuable asset for anyone wanting to gain a foothold in the UK market. If WhaleSharkMedia can buy up a number of smaller voucher sites across Europe it will be able to build a subscriber base to rival Groupon at an economical price.
Groupon is valued at $15 billion and has 115 million email subscribes, hence valuing each subscriber at around $130. VoucherCodes.co.uk with its four million subscribers was bought for $40 million, which would suggest a value of $10 per subscriber.
Added to this, VoucherCodes.co.uk founder, Duncan Jennings, at just 31, is one of the brightest stars in the online world. He has both the business acumen and the technical savvy to make an ideal European CEO.
If, as I suspect, the deal was based mainly on shares, then you have a partner with an investment in the future of the parent company, which maintains focus and loyalty for the future.
WhaleSharkMedia has been on a spending spree in the States and now in Europe with VoucherCodes.co.uk and Germany’s Gutschein-Codes.de, backed in part by cash from Google Ventures. Once they have mopped up a few more players and built the database up they just need to integrate the back office and they will have access to the spending habits of half the continent at their fingertips, which is a nice position to be in.
The main lesson that sites like ourselves and others can learn from this is that it’s all about the subscriber base. Paid search is fine for getting started but it eats up the profits.
Organic search is fickle and can disappear overnight if you are not careful. Millions of subscribers who love you because you save them money are more likely to stick around and be of value to a venture capital firm.
By Doug Scott
Founder
DiscountVouchers.co.uk
www.discountvouchers.co.uk
2 Comments
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While I appreciate a big subscriber database is a very valuable asset it appears to me that Discountvouchers.co.uk is just an aggregator of discounts being offered across the web.Which moneysaving expert does quite succesfully to over 8 million people I believe. I always thought the power of Groupon was their sales force who are out pounding the streets getting the deals in addition to their database. I think there is some way to go before Groupon are threatened.
Agreed Duncan that Groupon have the sales force, but numeros US companies now offer to find the deals for large publishers based on a pure rev share. These comapnies are all coming to Europe in 2012. Hence publisher reach becomes important, and I expect more and more publishers to get into the daily deals space over the next 12 months.
Doug
Ps MoneySavingExpert has 6 million members