Group buying start-up Kid U Not acquires three rivals

Niche group-buying site Kid U Not has acquired three of its competitors less than three months after launching, as the company seeks to ramp up its membership base of cost-conscious parents.

Kid U Not has confirmed the acquisition of Mum Daily Deals, Deals for Mum and Kiddie Coupons, all of which operate in the same space. The terms of the deals are undisclosed.

Founded in August by mumpreneur Caroline Selka, Kid U Not offers discounts on child-focused products and services including health, educational products, toys, clothing and travel.

“I realised there was a clear gap in the market for a daily deal site that helps ease the ongoing financial costs associated with raising and entertaining kids, so I established Kid U Not,” Selka says.

The company, which employs eight staff in total, is entirely self-funded by Selka and two other co-founders.

“One is on the tech side of the business, so we’ve developed all our own technology in-house,” Selka says.

Selka says Kid U Not has “struck a chord” with Australian families. The company donates 5% of the revenue from each online purchase to a children’s charity chosen by the customer.

Since its launch, Selka says Kid U Not has acquired 13,000 Facebook followers, and is growing its membership base by 50% each month.

She says the acquisition of Mum Daily Deals, Deals for Mum and Kiddie Coupons will help the company continue its ambitious growth plan.

Selka says all three sites were run by “small family operators” who were keen to exit the businesses, although she praised them for their passion and hard work.

The acquisitions have taken Kid U Not’s membership base from 12,000 to 60,000, with plans to increase it to 100,000 by early 2012, although there are no plans to make further acquisitions.

“This is an important step towards our goal of becoming Australia’s broadest family e-marketplace and the online destination of choice for incredible offers and savings,” Selka says.

The news comes four months after media conglomerate News Limited acquired online parenting start-up Kidspot and its related companies.

Kidspot, a portfolio of online and offline services aimed at women and mothers, was launched in 2005 by chief executive Katie May.

News Limited would not say how much it paid for Kidspot, but reports at the time suggested it was around the $50 million mark.

The acquisitions highlight the increasing demand for child-focused services, particularly among parents who are often cost-conscious and/or time-poor.

A recent report by Franchise Business Review, which surveyed 752 child-focused franchisees, found parents continue to seek new options to stimulate and educate their children.

“Be it through daycare or after-school programs, toy stores or special events – it’s safe to say there will always be… opportunities within this sector,” the report said.

This prediction is in line with recent findings from IBISWorld, which identifies child-focused services as a standout sector for future growth.

According to IBISWorld analyst Ian MacGowan, Australian parents will gradually become more inclined to pay for child-focused services and products due to work demands.