The online daily deal is white hot right now. But just how big is the playing field?
While Groupon is leading the charge with its fresh round of funding and $1 billion valuation, Seattle-based Tippr has announced plans to compete in at least 10 cities. Other brands such as Living Social and BuyWithMe also compete in several national markets with already existing local media sales forces. It’s a crowded space, for sure, and only getting more interesting.
For example, Tippr’s founder Martin Tobias thinks patents playing a role. He acquired several e-commerce patents from a dot-com boom-and-bust company called Mercata and feels this will give his company a competitive advantage. Tippr, which launched in February, is a unit of Kashless, which raised $5 million in venture funding from RRE Ventures and in 2008.
“The Mercata patents are the pocket aces of group buying,” Tobias aid in a release on TechFlash.com. “We have the strongest IP and most advanced technology platform in group buying, and that allows us to offer consumers and businesses exclusive features resulting in the best deals, terms, and experience for all involved.”
The Mercata technology powers a dynamic pricing engine that increases the discount on a particular deal as more consumers sign up. (This “tips” the scales in the buyer’s favor, which I assume is where the name Tippr came from.) As Tobias told Xconoomy, “We bring new features to the market. “Groupon is building a brand. We’re building software.”
According to the TechFlash report, Tippr also counts the following advantages:
- No minimum number of consumers to activate a deal
- Guarantees the on the best deals in the cities where it operates
- Deals never expire
It appears ready to work with local media companies, too, with a feature that “empowers media publishers and other local sites to build their own brand versus promoting Groupon and LivingSocial deals.” While that sounds like ambiguous press release speak, local media companies should be checking it out. The dynamic pricing technology is not likely something that will be developed in-house at a newspaper or TV station company.
