When Yahoo!7 informed the media there would have been a significant announcement on Thursday morning, there was no suspicion that a $40 million dollar acquisition was about to take place.
But as soon as the press release was handed to journalists gathered at the ritzy Sheraton on the Park hotel in Sydney this morning, it was more than clear why Spreets co-founder and chief executive Dean McEvoy was standing smiling in front of the microphone.
With revenue of $4 million in the month so far to January 21st 2011, the entrepreneur’s online company, which he co-founded with chief marketing officer Justus Hammer, has been operating for just twelve months. And yet Yahoo7! signed the deal to acquire the company as Spreets reached the mark of collecting more than 500,000 members, delivering more than 270,000 vouchers and saving consumers in Australia and New Zealand $40 million over the past year.
“We are number one, we sell more and we managed to do all that on our own organic growth,” McEvoy said.
A small business owner himself until 2003, when he sold his cafe, McEvoy’s first start-up after that time was a patented online restaurant reservation system called Booking Angel. The system was ranked by some pundits as worth of being included in the Top 100 Startups in Silicon Valley in 2007 and — McEvoy says — was fundamental in inspiring the creation of Spreets itself.
When he got back to Australia in 2009 for Christmas, the entrepreneur managed to find developers and enough time (32 days) to start a new online company, which was launched on his birthday, February 4th, with less than 500 members gathered among family and friends.
At that time co-founder Justus Hammer refused a job offer with Google in order to launch Spreets with McEvoy. Prior to Spreets, coming to Australia from Germany in 2007 to complete a Masters of Commerce in IT at Macquarie University, Hammer had held the role of marketing manager for online retail store Getprice and had been the marketing manager for GoYellow in Munich — Germany’s biggest yellow pages company.
Spreets offers deals discounted by 50% to 90% to its members according to their interests. The deal can be purchased at an advantageous rate only if a certain number of people buy it. In this respect social media – Yahoo7! CEO Rohan Lund said this morning – are crucial, as they represent the way people interact these days.
Over the past several months, a number of Spreets’ rivals have been extremely active in the Australian market, with investments being made in Jump On It, giant US company GroupOn entering through its StarDeals brand and even a new, ninemsn and Microsoft-backed site dubbed Cudo. Several of the rival sites have been quite vocal in claiming the local leadership in the space. Even today, for example, Cudo chief executive Billy Tucker claimed his site was the “number one”.
Yahoo!7’s plan is to invest heavily in Spreets and target smaller geographical verticals in order to reach a wider range of retailers, describing Spreets today as a perfect complement to its business.
Both McEvoy and Hammer agreed that with Yahoo! backing Spreets, they will be now able to focus more on local areas and local businesses, to maximize the number of businesses in their portfolio and thus of customers. “What Spreets does is not just about the deal, it’s giving people a reason to go and try new things,” McEvoy said. “That’s really powerful”.
This morning Mumbrella (video above) asked the site’s founders about the competition and whether there would be only one winner eventually.
“There already is,” laughed a jubilant McEvoy.
Video credit: Mumbrella