Groupon's continuing efforts to shrink down, streamline and centralize their eCommerce efforts have gotten another boost with the announcement the firm will be selling off its Indonesia business to KFit. The fitness startup is considered something of a strange match, as the year-old startup specializes in selling gym and fitness memberships in a similar manner to the U.S.-based ClassPass.
KFit reportedly has “no immediate plans” to change Groupon Indonesia’s business, which to date has about 1 million subscribers and 15,000 merchants onboarded. It is widely speculated, however, that KFit will expand on the famous flash-sale based eCommerce Groupon is best known for stateside. The deal is forecasted to close during Q3 2016, and its structure is interesting. Groupon Phillipines will become a wholly owned subsidiary of KFit, while Groupon in turn will become a “a strategic shareholder of KFit."
Translation: There may be almost no money changing hands in this deal. Given Groupon's recent purge of its less than strongly performing international properties, it seems possible that Indonesia was packaged out at an attractive (see: low) cost.
The deal will also function as KFit's entry into the world's fourth most populous nation and one of the few areas left where smartphones have still not hit market saturation. KFit is already online in 10 cities in Asia Pacific, Southeast Asia, Australia, Taiwan and Korea. So far, it has raised over $20 million in funds.
“Indonesia represents an untapped opportunity for us and serves as a natural expansion of our regional footprint in Southeast Asia,” noted KFit CEO Joel Neoh.
“The combination of Groupon Indonesia’s established presence and KFit’s experience in building a mobile-first platform will propel us in a high-growth local commerce market, further accelerated by increasing mobile penetration,” he added.
Speaking to TechCrunch in an interview, Neoh said he was not able to disclose further details of the deal itself, since Groupon is a public company and the transaction is pending. He did note the deal structure was a bit unusual.
“It’s a very specific case as we’ve been looking at the [Indonesian] market since the end of last year. It’s very attractive [country] for a consumer-facing company,” he said. “We want to build a platform [for] any time you are going out to experience local services … we’re building beyond a deals platform."