Bloomspot Leads an Industry Shift
What: $40 million in funding and a merchant guarantee
With all the chatter about Groupon’s updated IPO filings this week, and news that Patch is offering up daily deals in 800 (not a typo) hyperlocal markets, a couple of announcements from Bloomspot didn’t get as much attention as they otherwise might. The company said that it had scored a whopping $40 million in new funding, and revealed that it is using the data it collects to guarantee that deals they do will be profitable to vendors, or Bloomspot will cover the difference from its cut. There are a couple of important takeaways. First, Bloomspot’s execs are pushing the message to the media that it’s not a daily deal site. That would be news to its user base and it also signals a shark-jumping moment in the industry. (Seems like only five seconds ago that every online business was launching deal programs. Oh wait, it was…) Second, Bloomspot and its investors are recognizing that the future value is in making vendors more profitable, not less. It’s not about moving a bunch of crappy deals out the door and hoping the vendor can stay in business long enough to honor its vouchers, but smart use of data. Our prediction: Bloomspot might still be a deals site, but it will eventually be a data provider, selling its technology to other deal sites.