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BuyWithMe shows employees the door

Daily deal site BuyWithMe needs to sell more than coupons to stay afloat — the company is reportedly on a desperate search for a buyer, and has just laid off 100 employees with no warning and no severance. Employees reportedly knew the company was in trouble, but did not expect massive layoffs at this time.

BuyWithMe has been buying with abandon, buying six other coupon and loyalty companies during the last six months. Apparently these acquisitions boosted traffic, but BuyWithMe itself was not growing. Having run through its cash, the company reportedly tried to raise another round of financing to pay its bills, but set a $500 million valuation that proved too high to interest investors.

BuyWithMe is based in New York, and offers deals in Austin, Boston, Chicago, Dallas, Houston, Los Angeles, Philadelphia, Phoenix, and San Diego. Before this layoff the company employed roughly 200 people. Investors include Bain Capital and Matrix Partners.

In a statement, BuyWithMe CEO James Crowley mentioned neither a buyout nor an impending bankruptcy, saying “we did this so the company is in the best position to continue to serve its merchants and members. As an organization we’re continuing to pursue our business and to support our customers throughout the country.”

The daily deal space has been a hotbed of merger and acquisition activity and consolidation this year. Google has bought three coupon/loyalty card companies this year. Last month a report on acquisition activity completed by The Domains  found that valuation multiples were dropping sharply.

ABOUT AUTHOR

Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.

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