Jump On It makes founders overnight millionaires


Think Australia doesn’t have what it takes to build a new Google or Facebook? Think again.

Australian web 2.0 startup Jump On It today said it was on track to reach $24 million of revenue in its first year of operation — just three and a half months after it launched locally with the same business model that has made fellow startup GroupOn a billion-dollar business in the United States.

The company was founded by local internet veterans Colin Fabig, James Gilbert and Adam Rigby in November last year. Its model is simple: It will issue one deal — typically a discount at an Australia-based outlet such as a restaurant or hairdresser — per day to its subscriber database. Businesses who sign on to advertise their services only pay when they actually sign up customers.

“The aim of the merchant is to convert them into ongoing payments,” said chief executive Colin Fabig (pictured) in an interview this morning.

Fabig gives the example of a dentist. If such a small business was to advertise a so-called ‘coupon’ deal on Jump On It — which could give customers up to 90 percent off a visit — they will usually be able to sign that customer up for repeat business later on.

The model usually results in advertisers receiving hundreds of calls for bookings to redeem the coupons on the day they are advertised — and the sales keep on coming in throughout the month afterwards. A big part of Jump On It’s work is training the businesses on how to handle the volume.

Fabig acknowledges Jump On It launched to bring the model — popularised in the US by American startup GroupOn — to Australia. Groupon raised $135 million in a fourth round of financing in the US in April, with TechCrunch listing the overall valuation of the company at that stage as being US$1.35 billion.

Locally, Jump On It has raised much less — about $2 million, including $1.3 million from a consortium of investors led by Allen and Buckeridge chairman Roger Allen and Nextec capital, as well as money from the founders themselves.

But if Jump On It does hit $24 million in revenues over this year, that investment — by itself, massive in terms of Australia’s relatively small web 2.0 startup sector — will make its founders and investors overnight millionaires.

The maths are pretty easy — if Jump On It sends 800 customers a restaurant’s way at $40 a pop, it would pick up $32,000 for one day’s work. And with sites across most of Australia’s capital cities, Jump On It has the potential to magnify its revenue through targeting different geographies.

Much of Jump On It’s overnight success comes from Facebook. The company has gleaned 500,000 fans of its network of Facebook pages supporting its online deals — Facebook members pass the coupon links on between each other and ‘like’ them. Fabig says the company’s social media presence grew virally, but also through a bit of help with advertising on Facebook.

The company’s audience is generally between 20 and 40 and live in Australia’s big cities, enjoying the metropolitan lifestyle and trying new restaurants every several weeks, for example.

Jump On It has also built quite a large company — by Australian standards — in a short period of time. It now has 35 staff, in areas as diverse as sales, creative production, IT and customer service. And it offers life support to customers.

The startup wasn’t the first to launch a Groupon clone in Australia, and there is already a clutch of competitors in the market — sites like Scoopon, Spreets and cudo. In China, Fabig says there are even more — thousands.

Ultimately the model that Jump On It is following is much like that of suburban newspapers. Small service are attempting to reach audiences through a publishing platform. And Jump On It’s operation is geared much like a publishing business — it has a publishing schedule, works closely with advertisers and so on.

“The only thing is that newspapers and magazines have been going for years — and we’ve only been going for a year,” laughs Fabig.

Image credit: Jump On It


  1. I don’t understand those ‘simple maths’. 800 customers in a day paying $40 for a restaurant is itself quite optimistic. During 365 days that would produce $11 million, which is less than half of those $24 million. And I suppose that out of those $40 a big chunk would go to the restaurant itself…

    • That was just the example given me by Colin — however, I think many of the services that would be advertised would actually have higher costs than this. A hairdresser, for example, commonly charges anything up to and above $200 for a women’s haircut, cut and colour (can you tell that I’m married?).

    • What you are forgetting is that YOUR maths only incorporates ONE city…these guys have FIVE cities running. Thus, if each city were producing the 800 x $40 it would equate to over $55m

  2. Your reporting the total transaction value (TTV) which is not the same as the revenue. Making this article a load of $#T@.

    For JumpOnIt to be doing 24m in revenue for the year your telling me they are doing than $65,000 in revenues NOT TTL a day. Hmm? A quick look at their recent deals and you can tell thats not the case.

    Nice bit of marketing spin to make the company look allot successful than it actually is. Perhaps its a company struggling to keep up with the more dominate ones searching for some cheap marketing?

    C’mon guys

    • My personal opinion is that yes, Jump On It is hyping themselves up — and I can assure that I put that opinion strongly to Colin in the interview, and expressed extreme doubt that they were making the money that he said they were.

      However this is a news article and I had to report what he said. I am planning to publish an opinion piece on Monday which will analyse what he said — so my personal opinion will come out in that.

      • Hi Renai,
        I think it’s fair enough to report what he said, but it’s also the job of a news article to provide some analysis, otherwise the article just reads like a press release.
        Like Pete I appreciate your reporting on au startups.

        mei on fedang #startups

  3. Firstly I apologize for such a strongly worded comment before.

    I really appreciate your reporting in the Australian startup community and in no way pointing my finger towards you.

    I am just not a big fan of marketing tricky.

    Keep up the great renai.

  4. Renai, you forgot one very important piece…Margin!!!! These companies are all scrambling over the same small businesses for deals. I know for a fact they are lucky to get 10% margin on a deal. Add in the massive cost of sales people running around town to sign up these small business, there aint much left over if anything.

  5. Renai, good for you for covering one of the most magical consumer trends in recent times. While JumpOnIt, Spreets et al are chasing after services, you shouldn’t forget about Catchoftheday and BrandsExclusive who operate on the same premise of consumer urgency from a daily deal.

    I’d disagree on the margin from the ‘Insider’ – Groupon is now pushing for 50% of the gross transactional value as their take and probably the longer term industry average will net out at about one third.

    You should think about tracking the industry (just login to each site and note the number of transactions that happened at each price across all the cities) and add it all up and keep logging for the next year (or pay a virtual assistant in India to do it). You can then form your own estimates, write some analysis and sell it as a report etc. for a few hundred bucks.

    Also, there are some interesting second order effects, like a lot more reviews left about a local business after a deal has been run, which helps seo, which helps to win future customers (http://techcrunch.com/2010/07/17/how-social-media-drives-new-business-six-case-studies/)

    Finally, it’s not all strawberries and cream. Take a look at http://www.barbusinessowner.com/public/Groupon_Promotion_For_Bars.cfm

    • Keeping a track of deals and revenue is not easy for an outsider (I tried it!) You have to consider that deals are not always live for 24hrs (some run longer – especially over weekends – and others sell out in less than 24hrs). Couple that with the fact that there are often “Bonus Deals” to track and, with a bigger player like Jump On It, there are 5 cities to keep tabs on, it becomes incredibly hard to do it with any degree of accuracy…unless you are prepared to check back on all the sites on an almost hourly basis!

      • Zebo, I’m talking about looking in the /recent sections of most of the site (everyone but cudo says how many they sold). 15 mins in the morning to check the sites, note the type of deal, how much and how many for each city on each site. Boring, labourious work, but the data at the end would be useful and then you wouldn’t have to quote ‘expected revenue’ Delimiter could cite it’s own unbiased estimates etc.

    • Niki, you are right Groupon does get between 30-50% Margin. I am referring to the Australian companies who are getting 10% margin. There are way too many companies in this space and most wont last. Consolidation will happen and Australian market may be able to support two companies.

      • Yeah so what? The two that are left will be great businesses with fantastic characteristics though? If you take out any mention of Groupon or any Australian version and what you’ve said happens in any new, interesting market: A lot launch, most fail and a few go on to be leading companies. And I really do believe that a company like Seek, REA, Car Sales etc. will be created in this space.

        • Australian Merchants will never pay 30-50% margin, it just aint gonna happen.

          Catch of the Day could run Scoopon at a loss leader for the next 100 years. Therefore makes its tough for companies such as Jump On It who are a one trick pony.

  6. “The company has gleaned 500,000 fans of its network of Facebook pages supporting its online deals ”

    how accurate is this BS

    • Check their Facebook Fan pages and you’ll see it is pretty much 100% accurate. So not “BS” at all.

  7. Check it out now guys……….did you see they sold over 3000 vouchers for seafood not long ago? Do your maths!

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