Monday, September 24, 2012

Groupon buys Savored, a restaurant discount and reservation start-up

The leading daily deals website Groupon has acquired the restaurant discount and reservations start-up Savored, according to a blog post by Savored co-founder and CEO Ben McKean.

"Together, Groupon and Savored will be able to deliver even more exceptional dining experiences to consumers while continuing to focus on restaurant profitability," McKean wrote. "The Savored product will remain sophisticated and elegant, enabling diners to make reservations at the very best restaurants and receive discounts of up to 40% seamlessly taken off their bill."

The deal is being presented first and foremost as a technology deal, though most Savored users will see this as a deal between two daily deals sites.

Savored works by having users pre-pay $10 for a reservation which then grants them a discount on their restaurant bill. The business model assumes some will not use the reservation, or then the discount. For restaurants, the lure of Savored is that seats that normally would not be filled can be sold, even if they are discounted.

Launched originally as VillageVines, Savored works in ten cities: Atlanta, Boston, Chicago, Denver, Los Angeles, Miami, New York, Philadelphia, San Francisco and Washington DC.

The irony of the deal is that Savored has agreed to be acquired, while Groupon rejected its acquisition opportunity, choosing to go public instead. On the news Groupon stock sank trading at $5.14 a share, down over 2.5 percent.