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.