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Groupon Buys ideeli in a Sign of Retailers' Reliance on Mobile

The daily deals company paid $43 million for ideeli, a flash-sale site known for its strong mobile presence.

On Monday, Chicago-based daily deals company Groupon announced its purchase of ideeli, an apparel flash-sale site, for $43 million in cash. Ideeli, which ranked No. 1 on the Inc. 500 list in 2011, will continue to operate as a separate website. 

The acquisition underlines the importance of mobile to retailers. In addition to its fashion offerings, New York-based ideeli is known for its strong mobile business.

The move is part of an overall strategy to boost Groupon's cachet among the binge shopping set. It also signals Groupon's desire to round out its retail stock as it looks to compete with Amazon and potentially all manner of other retail businesses. 

In a press release announcing the sale, Groupon CEO Eric Lefkofsky said ideeli will help his company become "the place you start when you want to do or buy just about anything, anytime, anywhere." 

However, ideeli, which launched in 2007 and raised $12 million in funding last summer, was said to have trouble drawing additional funds, and experts speculated it fell out of vogue once shoppers tired of flash sales. For business owners, the acquisition serves as a sore reminder that flash sales is not where they wan to be. 

For now, ideeli will maintain its headquarters in New York and is offering a 20 percent sale on all items on the site through January 14. 

Last updated: Jan 13, 2014

JILL KRASNY | Staff Writer

Jill Krasny is a staff writer for Inc. magazine, where she covers the intersection of entertainment and startups. Prior to Inc., she was a writer for MTV and Esquire and an editor at TheStreet. She is a graduate of the University of Southern California with a degree in communication. She lives in New York City.

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