New York-based daily deals site BuyWithMe, which has spent the past few months buying up competitors, has fired more than half of its employees, BetaBeat first reported yesterday.
According to a laid-off employee who spoke with BetaBeat, the site hasn't been able to raise sufficient funding and is now on the verge of going under. “They were trying to raise a hundred million dollars at a $500 million valuation and there were no takers. If they had done a more conservative round, the company wouldn’t be in this kind of trouble,” an employee source told BetaBeat. Now, the employee said, “They are hoping to just sell and get some of the value back.” Another ex-employee added that the company has been trying and failing to “buy its way to growth.”
CEO Jim Crowley later addressed the layoffs in a statement, saying, “BuyWithMe did have a significant reduction in staffing this week. We did this so the company is in the best position to continue to serve its merchants and members. As an organization we’re continuing to pursue our business and to support our customers throughout the country.”
A current BuyWithMe staffer told Daily Deal Media that the company’s new focus on “quality and profitability . . . initially led to some of the layoffs.” While the company won’t be scaling down on its markets, it will be cutting back on the number of deals offered each day.
BuyWithMe, which has raised $21.5 million from Bain Capital Ventures and Matrix Partners, has been on an acquisition spree, buying up six other companies in the last six months. “The only one they paid a lot for was [card-linked loyalty company] Edhance,” one former employee told BetaBeat. “And that company is the only reason a buyer would be interested” in acquiring BuyWithMe, he added.