Chicago-based Groupon Inc. (GRPN) took over FeeFighters, a startup that provides online payment services and comparison shopping for credit card processors, Forbes reported last week. Financial terms of the deal were not disclosed.
FeeFighters helps small businesses to calculate and compare the fees charged by various credit card processors and also offers other services like its own payment gateway, Samurai. The FeeFighters calculator can be used by businesses to compare fees based on transaction size and volumes. Most of FeeFighters employees will become Groupon employees after the takeover.
Most of Groupon’s success is on account of its first-mover advantage, as the company started in 2008 and grew very rapidly to take the leading share. Its coupons (referred to as groupons) are the most well-recognized discount coupons available for customers.
In order to generate additional revenue and improve its profitability, Groupon has been offering small businesses with auxiliary services like Groupon Scheduler and its new appointment handling service (both launched in March).
This FeeFighters acquisition will also provide businesses with the cheapest payment gateway with additional services, there by improving Groupon’s core daily deals offering, driving its growth momentum and top line growth.
Groupon appears well positioned to grow through strategic acquisitions. In order to help small businesses, expand its technology and fight growing competition, Groupon is on the acquisition spree this year.
In February, Groupon acquired travel site Uptake, which helps to find information on travel destinations, Hyperpublic which aggregates place and deal data, and Adku, an e-commerce data firm. We believe these acquisitions will help Groupon to expand its business, increase sales and provide a competitive edge over its closest rival LivingSocial, Amazon.com Inc. (AMZN) and Google Inc. (GOOG).
Currently, Groupon carries a Zacks #3 Rank, indicating a short-term Hold recommendation.
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