Groupon Goes For The High End With Groupon Reserve For Fancy Meals, Hotels, And More

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Groupon Goes For The High End With Groupon Reserve For Fancy Meals, Hotels, And More

Groupon has built up a reputation for a soup-to-nuts approach to bargains for goods and services, with deals for usually-expensive meals pitted against offers for cheap leg waxes. Today, however, it is launching a new product that it hopes will build up its profile among those seeking out some of the finer things, with the launch of Groupon Reserve.

From today, Reserve goes live in 10 markets: Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York City, Philadelphia, San Francisco and Washington, D.C.. The plan is to expand to more cities in the U.S. and in key international markets by the end of 2013. (That’s progress for Groupon, which up to now has been very slow in rolling out internationally services that it launches in the U.S., largely because each country, added inorganically and by acquisition, has been built on a different backend system.)

To be clear, Groupon is still focused on offering its users discounts — the first deals that will appear on Reserve include 40% off meals from a selection of fine restaurants from Savored.com, a restaurant reservations portal it bought in September 2012. The aim, however, is to court consumers who are looking for the “finest things to eat, see, do and buy,” thereby potentially grabbing sales with higher margins.

“Groupon Reserve is an important step in our journey to become the leading marketplace for online deals, where consumers can come to Groupon and discover great businesses at unbeatable prices,” Groupon CEO Eric Lefkofsky said in a statement. “As Groupon has evolved, we’ve seen growing demand from our customers for upscale offers and exclusive experiences. Reserve gives the most prestigious brands a new way to reach our large and desirable audience.”

Groupon says that over time, Reserve will expand to include deals from spas, salons and hotels — presumably those operating specifically in the five-star bracket.

The Reserve deal will be a step ahead with Groupon in another respect as well. It’s furthering the idea of creating offers for users based on reservations and not upfront payments, which are not the norm among those who, for example, regularly eat at Michelin restaurants. It will also mean that the businesses setting deals through the system can offer more flexible offers and pricing to users. This is something that smaller competitors like Pirq have also pushed ahead in doing to better target bigger spenders, and more high-end establishments. For their part, high-end businesses have been slower but are now, like their less expensive counterparts, aretrying to utilize e-commerce innovations better to manage yields and footfall in their bricks-and-mortar businesses.

“Whether it’s because of a slow night or a last minute no-show, even the best restaurants have empty tables,” Lefkofsky continued. “Reserve provides these businesses with a yield management solution to bring customers through their doors at the times they need them the most.”

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IAC's CityGrid, Parent Of CitySearch And Urbanspoon, Lays Off Two-Thirds Of Staff, As Local Ad Push Bites

TechCrunch has learned that CityGrid Media, the parent of local ad-based listings portals CitySearch, Urbanspoon and Insider Pages, is laying off two-thirds of its staff, or around 130 people. IAC, which owns CityGrid, confirmed the number to us and described the process as “streamlining.” The layoffs are taking place amidst another big shift at CityGrid: Andrew Moers, president of another IAC subsidiary, Ask Partner Network, is taking over as CEO. This is, however, only a temporary move: Ron LaPierre, who has been acting CEO since April, is taking a leave of absence for family matters and is expected to return in August.

“We can confirm that there has been a reduction in staff at CityGrid Media. The layoffs will increase operating efficiency, reduce costs and have a meaningful impact on the company’s future profitability,” a spokesperson said. “By streamlining operations, we expect to grow the CityGrid Network and increase returns for both publishers and advertisers.”

The news comes about eight months after another round of layoffs at CityGrid: in October 2012, around 15% of staff were let go. The CEO at the time, Jason Finger, said that the move was related to a shift from cost-per-click (CPC) advertising in the local space to a subscription-based and cost-per-acquisition (CPA) model. (CityGrid, which is made up of some of the oldest companies in this space, based its revenue model around CPC.)

Finger, who had been the co-founder of online delivery company Seamless and joined as head of CityGrid in March 2012 — actually quietly left IAC just over a year later in April 2013, according to his LinkedIn profile. Among his current activities, Finger is now an adjunct professor at NYU, an advisor to American Express’s OPEN small business e-commerce program, and a managing member at Oxygen Capital Partners.

It’s not clear that the CPC/CPA shift, as Finger described it, is what is behind IAC’s latest round of layoffs, but it seems that in any case CityGrid is going to continue to operate as normal and with the same strategy of targeting local businesses for advertising and marketing — just with a much smaller staff and smaller cost base.

While Citysearch, founded in 1995, was one of the earliest movers in the area of online local listings, it’s faced a lot of competition from a lot of other sites focused on local information, and the concept of monetizing that data. Ditto the other sites in the CityGrid portfolio.

Some, like Yelp like Foursquare, have put a huge amount of effort into specifically taking that experience mobile, in an effort to tap into the growing number of users who want listings on the go. Others, like Square and Groupon, are looking to double up basic listings information with other services for local businesses, like payments and inventory management.

Even so, there are question marks over whether the leaders in this area are even able to make decent returns from any of this business yet. And that’s not counting the many others that are approaching the concept of local from other directions, like Nextdoor with its neighborhood-focused social networks; or Patch, owned by TechCrunch’s parent AOL, which has forever been trying to turn profitable.

In that context, CityGrid struggling with its own attempt to make money out of the local space makes a bit more sense — and also underscores the urgency of IAC needing to figure out what its unique selling point will be going forward.

Photo: flickr

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First Firefox OS Smartphone Has Arrived: Telefonica Prices ZTE Open At $90 In Spain, Latin American Markets Coming Soon

TechCrunch

First Firefox OS Smartphone Has Arrived: Telefonica Prices ZTE Open At $90 In Spain, Latin American Markets Coming Soon

Back in February at the Mobile World Congress tradeshow a plethora of carriers pledged their support for Mozilla’s HTML-5 open web mobile platform, Firefox OS, which is hoping to shake up the low-end smartphone segment. Today, the launch date of the first commercial Firefox OS phone has been confirmed: the ZTE Open will go on sale tomorrow in Spain, on Telefonica’s Movistar network.

The handset will cost €69 (around $90), which includes a pre-pay balance of €30 for prepaid customers plus a 4GB microSD card. The carrier is also offering an option of zero interest financing for post-paid customers.

Telefonica said it also plans to offer the handset in additional markets “ in the coming weeks” – name-checking Colombia and Venezuela. When it announced  support for Firefox OS back in February it said its first Firefox-powered phones would be sold in Latin America and Spain. In the event, Spain gets first dibs. Also today, Telefonica confirmed the ZTE Open will be the first of “a number of Firefox OS devices” it will launch this year — “across a range of different price points”. Which suggests it’s also hoping to challenge Android’s expansive mid-tier, although the ZTE Open sits firmly in the low end segment.

Commenting on the launch in a statement, Luis Miguel Gilpérez, CEO of Telefónica España, said: “We believe that smartphones need to be more open and that the web is the platform for making this possible. Consumers should not be locked to any one system but have the choice to consume the content they want and the flexibility to be able to take it with them when they change devices. This first open web device marks a significant milestone in making this possible. This is just the beginning as we plan to bring a wide range of Firefox OS devices to our customers.”

This is not the only diversification effort Telefonica has made in the smartphone space in recent times. Just last week it announced a joint marketing effort with Microsoft to push the Windows Phone 8 platform in a bid to dilute the power of Android and iOS. Firefox OS can be seen as another branch of the same strategy, as carriers seek ways to erode the dominance Google especially has established in smartphones. Figures out today from Kantar peg Android’s smartphone share in five European markets at 70%, for instance.

Too much power concentrated in the hands of a single company weakens the position of carriers — giving them an incentive to push alternatives. Unlike Android, Firefox OS’s openness offers them a vehicle for adding and promoting their own services without having to put more power in the hands of Google.

Specs wise, the ZTE Open is a low end affair, with a 3.5-inch, HVGA TFT touchscreen display, 256MB of RAM and 512MB of ROM combined with a 3.2MP camera. Location-based services are provided by Nokia’s HERE maps.

The ZTE Open is not the first phone running Firefox OS to go on sale. Spanish developer phone startup, Geeksphone, put out two developer handsets running the OS back in April, selling out of its stock within hours. But this is the first commercial device launch of a device running the Firefox OS.

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Investors Are Wont To Follow - Data From Seedrs Shows Equity-Based Crowdfunding Is No Different

It’s said that investors are wont to follow. Once a startup has persuaded the first angel or VC to invest, it’s significantly easier to get others to join the round. A similar mentality at scale can be seen in crowdfunding. Campaigns that garner enough backers early on reach a tipping point that often sees the project funded well before its deadline. Meanwhile, those that fail to attract enough initial backers are usually destined to be consigned to the crowdfunding graveyard.

In a blog post published today, Seedrs, the UK site that makes it easy to invest in early-stage startups, sheds some light on what it takes to reach the required tipping point to get funded through its equity-based crowdfunding platform. The key takeaway is that startups who are able to mobilise what Seedrs is calling “network” investors — people who have learned about the startup not through the platform but via friends, family members or someone else in their external network — have a far better chance of being funded.

… if there is one secret to success on Seedrs (or on any crowdfunding platform, be it equity-based or rewards-based), it is this: independent investors will only invest meaningfully if they see that the deal has momentum; and the only way to create momentum is to get network investors to invest the first chunk of capital.

Specifically, it pegs the tipping point of any campaign at 30-35% funded, after which, based on historical data since since Seedrs launched 11 months ago, a startup will almost certainly go on to raise its target funding. “If you want to stand a strong chance of successfully raising capital through Seedrs, you will need to mobilise your networks to invest about 30% of the capital you are seeking,” notes the post. It’s only after this point that “independent” investors, the majority of Seedr users who use the platform to discover startups that might be worth investing in, will likely follow in sufficient numbers to see a startup funded.

The data also shows a case of diminishing returns. To date, every startup that has hit 35% funded on Seedrs has gone on to get the full 100% of its target funding. Reach 30% funded and this drops to 90%. Meanwhile, achieving 20% funded brings the odds of meeting the full target to around 80%, all the way down to 5% equating to roughly a 50-50 chance of being funded.

Overall, Seedrs says that of the 200+ startups that have seen their listing go live on the platform, slightly fewer than 15% have hit their targets. “In other words, starting from 0% funded, you have about a 15% chance of making it,” writes the company.

Thus, the way to increase those odds is to mobilise friends and family and others in a startup’s external network to take the lead in investing so that independent investors registered on Seedrs will follow. Considering it’s often argued that crowdfunding replaces the friends and family round, that’s somewhat ironic. However, the psychology behind this pattern of behaviour isn’t really anything new.

Seedrs says it’s partly because independent investors want to see that a startup’s founders are willing to do the hard graft of bringing in investment though their own networks, and can sell their vision. “The other reason is that that’s how human behaviour works,” writes the blog post, noting that people like to be part of something that’s “hot”, along with a more rational reliance on the so-called wisdom of the crowds, especially when that crowd has put its money where its mouth is.

“What this data shows—and it’s corroborated by loads of anecdotal evidence we’ve received—is that equity crowdfunding works best when the entrepreneur works hard to market the campaign and drive investors from his or her extended networks”, Seedrs CEO Jeff Lynn tells TechCrunch. “Independent investors don’t want to invest in a deal that’s 2% funded, and why should they? If the entrepreneur doesn’t have the skill and hustle to get friends, family, community members and others to put in a little bit of capital (and with a £10 minimum, it can be a very little bit), what chance is there that the entrepreneur will be successful when it comes to generating sales, driving traffic or hiring talent? Meanwhile, once our investor base sees that a deal is moving and getting interest, they have very deep pockets and are willing to reach into them.”

To that end, Seedrs has seen 26 funding campaigns succeed since it launched just under a year ago. £1,360,526 has been invested through the platform in total, with the average amount raised being £52,328 for an average of 14.5% equity from an average of 76 investors.

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Delivery Hero Tops Up Series D With $30M As Its Global Take-Out Service Heads For Profit

TechCrunch

Delivery Hero Tops Up Series D With $30M As Its Global Take-Out Service Heads For Profit

While others in the online food delivery space stumble, Delivery Hero is helping itself to some fresh Series D funding today: the online take-out ordering service has announced $30 million in additional Series D funding, led  by Phenomen Ventures with support from existing investors. The follow-on funding comes almost a year after it closed a $50 million Series D led by Kite Ventures.

Delivery Hero, which is headquartered in Berlin and was founded in October 2010 by startup factory Team Europe, said it is bringing more international investors on board after confirming it will reach profitability this year.

Delivery Hero currently generates more than $400 million in annual turnover, partnering with local restaurants to deliver millions of monthly orders across the 14 international markets where it operates, namely: Austria, Australia, Denmark, China, Finland, Germany, India, Mexico, Poland, Russia, South Korean, Sweden, Switzerland and the U.K.

It would not comment on its current valuation, in light of the follow-on funding, but a spokesman said it’s “a significant increase reflecting the great progress since last August” — i.e. when it closed the first tranche of the Series D. He confirmed Delivery Hero’s total funding to-date is $116 million equity, plus $10 million venture debt.

Phenomen Ventures, which has previously invested into the likes of Fab.com, OneTwoTrip and Hailo, is making one of its largest investments to date with Delivery Hero, according to the company. In a canned statement, Dmitry Falkovich, founding partner of Phenomen Ventures, said it’s been “amazed” by the development of Delivery Hero over the past two years.

Delivery Hero said it will “primarily” invest the follow-on Series D into strengthening its presence in existing markets but also said it plans to ‘further expand its position’ — without specifying whether that means expansion into new markets, or merely ramping up its existing operations.

Delivery Hero competes with the likes of Just Eat, the Samwar brothers’ backed Food Panda, and GrubHub in the U.S.

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Android, Led By Samsung, Continues To Storm The Smartphone Market, Pushing A Global 70% Market Share

Google is grappling with an ongoing antitrust case in Europe over its online search business, and if its rivals have anything to do with it, that might extend into Google’s power in the mobile sphere, too. Figures out today from Kantar Worldpanel may not help Google’s case very much. The analysts say that in the last three months, Google-powered smartphones, running Android, accounted for more then 70% of sales in the region’s five biggest markets of Great Britain, Germany, France, Italy and Spain — part of a wider, global trend of Android continuing consolidate its leadership position in smartphones. And the secondary story here is that much of this success is being led by Samsung, which now accounts for nearly half of all smartphones sold in the region.

Although smartphone penetration is slowing down in developed markets like Europe, Android’s does not appear to be: that 70.4% of sales is nearly 10 percentage points higher than it was a year ago (61.3% in the three months that ended May 31, 2012). We are asking Kantar (a market research division of WPP) about what Google’s global share of smartphone sales is at the moment, but in March it was 64% and with Android’s share rising in every market over the last few months, that will mean that this 64% share will be approaching 70% globally soon.

A similar story is being played out in China, now the world’s biggest market for smartphones. There, Android has basically won the game (for now), with over 70% of all sales of smartphone devices accounted for by Google’s platform.

It’s not clear from Kantar’s figures whether these are all official Android builds, or whether this figure also accounts for forked devices, which will not work with Google’s wider ecosystem of products like its app store, billing services, and advertising. (We’re asking and will update if/when we find out.) Ironically, the fact that there are such strong local players, producing smartphones catering for the Chinese audience, means that in any case Samsung does not dominate in China in the same way that it does for the rest of the global Android (and smartphone) landscape.

Interestingly, Kantar highlights that it’s not exactly plain sailing for Samsung in Europe, either — in the UK, for example, which now has a smartphone penetration of 65%, the new Xperia Z smartphone from Sony is putting in a strong performance, with 38% of Xperia purchasers being ex-Samsung owners, “the majority of whom have upgraded from the Galaxy S2,” writes Paul Moore, global director at Kantar Worldpanel ComTech.

I’ll believe in a Sony resurgence when I really see it, though. One market is not enough to prove that, in my opinion. But it does point to another issue: whether Samsung has a strong enough brand to keep users sticking to it. Kantar notes that Samsung has the second-highest loyalty rate in Britain after Apple (59% versus 79%). One of Apple’s key factors is its strength across different consumer electronic hardware, specifically PCs — something highlighted last week by Gartner as well in some research across sales of the whole category of IT devices.

In the U.S., Android has also pulled ahead, now accounting for more than half of all smartphone sales at 52% (compare that to 49.3% at the end of March). But Kantar points out that Apple’s relatively new relationship with T-Mobile has given it an extra push, and provided a counterbalance against the Android juggernaut. iOS sales grew by 3.5 percentage points, the most of any platform. Apple’s platform in all took 41.9% of sales in the U.S.

“Across Europe, Android growth remains strong. However, in the US Apple’s expanded distribution agreement with T-Mobile is helping the iPhone keep Android growth at bay. T-Mobile is the smallest of the big four US carriers but it does have the capacity to give iOS a boost, particularly as 28% of its customers plan to buy an iPhone when they next upgrade,” writes Moore.

For those who are tracking how the smaller players are faring: BlackBerry lost nearly 4 percentage points is now down to just 0.7% of sales in the last three months — one kind of proof that its new push with BB10 is not giving it the sales bump it so crucially needs right now. In a market where it used to be the smartphone leader, BlackBerry is now selling almost as few as Symbian, a platform that has never done well in the U.S. and has now been discontinued by Nokia. Windows Phone, meanwhile, is respectably rising if still tiny compared to the big two — up 0.9 percentage points to 4.6%.

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With $5M In Its Coffers, Game Publisher Pubgames Sets Its Sights On Southeast Asia

TechCrunch

With $5M In Its Coffers, Game Publisher Pubgames Sets Its Sights On Southeast Asia

Taiwan-based Web and mobile game publisher Pubgame has raised a Series A round led by Shanghai-based venture capital firm The CID Group and super angel investor appWorks Ventures. Though Pubgames did not disclose the exact amount, when combined with its previous April 2012 angel round of $500,000, Pubgames’ Series A brings its total funding so far to more than $5 million.

Pubgame, which was founded in 2011, will use the funds to expand further into Southeast Asia countries and build a social gaming platform that will allow players to communicate with one another and exchange characters in its role-playing games.

The company’s user base consists mostly of mid-core gamers. Of the 1 million players who have signed up so far, about 60% to 70% are located in Taiwan, 10% to 15% are in Hong Kong and roughly 10% are based in Singapore, Malaysia and other Southeast Asian countries. Pubgame currently offers 16 titles, with one to two new games added each month.

Founder Ben Tseng hopes Pubgames’ growth strategy will help it double to triple its revenue this year. He is especially enthusiastic about Thailand and Malaysia because social gaming is popular in those countries and players are more willing to make in-game purchases. Pubgames says its in-game payrate is 5% to 8%, while its ARPPU (average revenue per paying user) is a generous $100 per month. The company targets male players between the ages of 25 to 40 because they have more spending power than players in their teens and early twenties. Tseng says many of Pubgames’ top customers own small businesses, such as restaurants or stores, and play games to pass the time while waiting for customers during off-peak hours.

Thailand and Malaysia’s gaming markets remind Tseng of Taiwan’s three to five years ago, which fuels his belief that Pubgames’ team has the expertise to leverage growth opportunities in those two countries. The company has partnered with leading Chinese game developers, including 37wan, Yaowan, 7Road and Forgame, who want to expand into Southeast Asia.

“Entering overseas markets is not easy for them and as a Taiwan-based company we know the market much more than they do,” says Tseng.

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