Groupon Bags Social Shopping Startup Mertado

Groupon has acquired a new social shopping company called Mertado.

Image: Glassdoor.com

Now that it is a public company, Groupon appears to be on a buying spree for smaller startups. Its latest acquisition: Mertado, a social shopping service that got off the ground at Y Combinator, and which has expertise in video content and social shopping.

Mertado, which says it creates “shopping experiences that build bridges between content, commerce, and community,” announced its new owner on the company blog. Terms of the deal were not disclosed.

“Groupon has been a pioneer in social commerce in many ways, and when we started talking with them, it became extremely clear that they shared the same set of values as us,” the Mertado blog post said, directing its users to subscribe to its new daily deal parent by going to Groupon Goods. The news, which broke late Friday, is a sign that Groupon is increasing its focus on the Groupon Goods business, through which it sells discounted merchandise.

Mertado, a member of the Y Combinator class of spring 2010, launched in April 2010. Its CEO Vijay Chittoor, along with cofounders Mehul Shah and Rajiv Bhat, will join Groupon, the Chicago-based company said.

The startup closed a $2.3 million series-A funding round in September that it was using to develop its newly launched Mertado TV, which showcases content developed by programmers such as the Food Network, Fine Living, and Better TV, and uses the Facebook platform to integrate them with home and kitchen products featured in the Mertado catalog, according to FinSMEs.

A Groupon spokeswoman suggested that the video business is of interest to the daily deal company, telling Crain’s Chicago Business: "Mertado has shown a great level of innovation in the social commerce space—for example, the launch of Mertado TV, combining lifestyle video content and product selection. We're looking forward to leveraging the team's expertise."

Last month, news surfaced that Groupon had earlier in the fall acquired another Silicon Valley startup, Campfire Labs, whose big investment backers include YouTube cofounder Steve Chen. The company, which was founded by Naveen Koorakula, the company's CEO, and his wife, Sakina Arsiwala, has been helping Groupon with its social-media capabilities.

Mertado says its own site will shut down on February 28 and that existing customers will have customer-service access until that time.

Groupon is also bolstering its business in India, where it has reportedly made a deal with the Indian arm of global e-commerce player eBay. Under the deal inked earlier this month, the country's biggest e-commerce portal eBay has put up a tab on its homepage directing users to Groupon's Indian unit Crazeal.

Crazeal chief executive Ankur Warikoo confirmed the development to an India-based news station, saying the deal benefits both companies since it leverages their synergies. Crazeal specializes in offers on travel and local services, which include wellness, food and beverages, beauty, and areas in which eBay does not have a presence, Warikoo told New Delhi Television.