Groupon Acquisitions All About Getting Past the One-Night Stand

Groupon announced its acquisition of NYC-based Hyperpublic over the weekend, a startup focused on layering data on top of maps to make it easier to provide contextual information about places on a hyperlocal level. Groupon also acquired Kima Labs, the company behind Barcode Hero and TapBuy, in a deal announced just hours after the Hyperpublic buy. These two mobile-focused purchases seem to suggest a desire on Groupon’s part to extend the relationship between shoppers and Groupon’s merchant partners.

Hyperpublic‘s services prior to acquisition included Places+, which provides fresh information around points of interest, including an aggregation of daily deals associated with the location, as well as recent status updates. Other aspects of Hyperpublic’s platform include tools to surface only locally relevant deals instead of general ones, as well as data on hyperlocal demographics. That includes information like “Twitter handles of vegans in the East Village,” for example, according to Hyperpublic’s marketing materials. In a statement, Groupon said it’s “investing in harnessing local data as part of its product strategy,” which is why Hyperpublic made a good fit for acquisition.

Kima Labs, a startup founded by Amazon alumni, offers products that improve the mobile shopping experience. Groupon noted as much in an official statement it provided about the acquisition:

Kima Labs has developed popular apps that make mobile transactions easier, more fun and more of a possibility for merchants. We’re excited by the team’s ability to create technology that consumers love, and we believe they’ll be strong assets in our pursuit to change the way people shop.

Their app TapBuy manages mobile purchases in addition to daily deals, making the buying process as frictionless as possible by tying credit card info into a user’s device and requiring only the entry of a pin number to make a purchase. Another of Kima Labs’ apps Barcode Hero aims to make in-store shopping more social, allowing people to scan barcodes of things they’re thinking about purchasing, which grants points and allows them to share your shopping experience with their social networks.

A lot of early Groupon acquisitions were about expanding the geographic footprint of its daily deals offerings; it bought Europe-based MyCityDeal, South America’s ClanDescuento, Singapore’s, Japan’s and Russia’s all in 2010. But these latest acquisitions, as well as the purchase of social shopping service Mertado just last month, are aimed at increasing the depth of its product, rather than the breadth of its reach.

It’s a good strategy for the now-public company. Groupon’s shares experienced a considerable dip early in 2012 after a survey announced that merchants seemed mostly dissatisfied with the daily deal arrangement. The stock slumped once again early in February, when Groupon’s first quarterly earnings report failed to impress. One of the big reasons? Growth from its international expansion might not be enough to “counteract its slowing daily deals business,” Collins Stewart analyst Mayuresh Masurekar told the Associated Press.

Groupon’s best hope to restore the confidence of investors lies in its ability to build stronger relationships with the merchants that provide its revenue, and that means helping those merchants better target and build relationships with local users. Groupon took a step in that direction last September with its Groupon Rewards program, which aims to help merchants track and reward their most loyal customers. Loyalty startup PunchTab CEO Ranjith Kumaran also told us in a recent interview that his company has been approached by Groupon to talk about a possible partnership. “We got the call early on from Groupon to see how we could work together,” Kumaran said, though he didn’t provide any further information about where that call might lead.

Changing its focus from attracting customers to building lasting relationships with partner merchants will be a challenge for Groupon and could ultimately prove the difference between sinking and swimming as a public company. Watch for more acquisitions and initiatives from Groupon aimed at furthering the goal of turning one-night stands between merchant partners and customers into lasting, meaningful relationships.

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