Group Buying Startup Groffr Acquires MobStreet [Planned Vs. Impulse Purchase]

Groffr, one of the few group buying startup that is actually concentrating on forming groups to get a collective bargain, has acquired Mumbai based Mobstreet was a daily deal site that shut down shop recently. Groffr has acquired the customers, assets, merchant relationships as well as the management team of The deal is not a high value one as Mobstreet did not have much traction but given the experience that the founder had in starting and shutting down shop in 1 yr, this should add significant value to the company. 

Unlike other group buying sites that concentrate on low value impulsive purchase decisions like a eat out or spa session, Groffr has focussed on high value planned purchases like real estate, automobiles, LCDs etc. Groffr claims to have brokered Rs.100Cr worth of property since inception, quite a believable number.

Spandan Tolia, founder of MobStreet, was in constant touch with us and did mention that it would be very difficult to scale the daily deals business without proper funding. Also, given the low entry barrier in the business, the space is just too crowded with little to no differentiator for the affiliate merchants or the consumers. At Groffr, he will be heading new categories that would be lower in value than real estate but still be planned purchases. He says they are exploring about 10-15 areas where group buying model could work and will be in synergy with Groffr’s existing categories.

The business that Groffr revolves around is not about creating trial usage but actually generating leads for full value purchases. This business is more about an offline network leveraging the online reach.

What are your views on Groffr’s business model? Is this already happening in tier-2/3 cities in an unorganized manner?

[Naman is a startup enthusiast and has worked with couple of Indian startups as Product Manager. He is the founder of FindYogi]

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