“We have three revenue streams -our platform fee ranges from . 5,000 to Rs 25,000; transaction fee charge is 5%; and we take up to 20% commission from the 10-15% discounts that merchants offer to the customer at other local places through the cashback model,“ said Anshoo Sharma, cofounder of MagicPin.
Crown It, which also uses the cashback model, charges 15-35% commission from the 10,000 merchants it has partnered with -less for food and beverages and more for spa and wellness. The startup said up to 20% of 8,00,000 registered users transact every month.
“We don’t spend on marketing at all -91% of our users come through our referral programme that is inspired by Dropbox and Uber,“ said Sameer Grover, founder of Crown It.
The startup said it posts a monthly gross merchandise value of (GMV) of ` . 36 crore and wants to take this to `. 100 crore by the end of 2016. “We are on target to break even by 2017,“ Grover said. Little raised over $50 million `337 crore) in July 2015 from in(.vestors including Saif Partners and Tiger Global Management.
Most transactions are related to food and beverages and last-minute hotel rooms.
With over 11,000 merchants aboard, the startup says it’s grown 30x in six months, driving business for 3,000 merchants on a daily basis, offering commissions ranging from 8% to 14%.
In 2016 alone, half a dozen star tups have sprung up in the space.Smaller companies like Shouut and GoYaNo have individually ra `35 lakh) from angel ised $500,000 (.investors. “It’s a huge market with a lot of potential. There is no major player in sight, which is the reason why investors are betting money on this segment,“ said Shekhar Kirani, partner at Accel India.
“Within the next 18 months, it will become clear which business model works best and who the strong players are in the space.“
According to VCCEdge data, investors have closed over 15 deals in 2015 and half-a-dozen deals in 2016, investing more than ` . 100 crore in the hyperlocal deal discovery segment.