Meet the latest "viral loop" company to enter the big leagues
Boston-based Buywithme, an online "group buying" site, will today announce that it has secured a $5.5 million investment from Matrix Partners. Prior to the investment, the startup had been privately funded by friends and family.
Buywithme, like rival Groupon, combines the power of online shopping with social media.
Matrix's lead partner on the deal, Nick Beim, also spearheaded the firm's $43 million investment last August in Gilt Groupe, the U.S. leader in another buzzed-about sector of ecommerce, online luxury sample sales. (The model originated in France with the site Vente Privee).
"There are interesting similarities between Buywithme and Gilt when it comes to the nature of viral loops and the best merchandising and marketing strategies to optimize virality," says Beim.
One of the hottest corners of e-commerce today, "group buying" sites offer daily limited-time deals in the form of deep discounts from local merchants, provided a minimum number of buyers "buy in." Groupon, based in Chicago, last month raised $25 million from Accel Partners. More
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