KFit acquires Groupon’s Indonesian operations
Fitness-sharing platform KFit has diversified its business with the acquisition of Groupon’s Indonesian operations.
With the voucher-based ecommerce venture looking to streamline its global business in the light of changing consumer purchasing patterns, the sale of Groupon Indonesia has been described as “unusual” by business analysts.
Malaysia-based KFit said it has “no immediate plans” to change Groupon Indonesia’s business, which claims to have more than one million subscribers and over 15,000 merchants, although KFit would be expected to use Groupon’s deal-based e-commerce offers to promote its fitness clients.
The deal, which is scheduled to close in the third quarter of this year sees Groupon Indonesia become a wholly-owned subsidiary of KFit, with Groupon Inc becoming “a strategic shareholder of KFit”.
With no financial details of the deal revealed, this wording suggests there may have been little-to-no price upfront for the transaction.
Groupon purged a number of its struggling country businesses last year, so it remains possible that it was open to offloading its Indonesian business at an attractive cost.
The deal signals KFit’s entry into Indonesia, the world’s fourth most populous country and one of the few sizable markets where smartphone sales are tipped to continue to rise despite a global slowdown.
Currently KFit is present in 10 cities in South East Asia, Australia, Taiwan and Korea, and it has raised over US$20 million from investors like Sequoia Capital - via its India and South East Asia fund - and debt-financing from Innoven Capital.
KFit founder and Chief Executive Joel Neoh’s background prior to starting KFit was with group-buying site GroupsMore in Malaysia which Groupon acquired within months of its launch. Post-acquisition, Neoh led Groupon’s operations in Asia before leaving to start KFit in 2015.
Explaining the move, Neoh stated “Indonesia represents an untapped opportunity for us and serves as a natural expansion of our regional footprint in South East Asia.
“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.”
Such a close linking of a fitness-sharing platform with a 'coupon' site may also see a new era of fitness class discounting and potential competition.
In October last year, KFit merged with two Australian competitors, Classhopper and SweatPass, to accelerate its presence in Australia and New Zealand.
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