The concept of group buying has exploded in recent years largely due to the massive growth of Groupon. Their acquisition spree has motivated entrepreneurs all over the world to try clone Groupon‘s success in their local market and hope to be one of the lucky startups to exit at the hands of American players‘ mammoth $1 Billion funding round.
In South Africa two local entrepreneurs have done just that – Dan and Wayne from Twangoo – by selling 100% of their company to Groupon for an undisclosed amount (our guess is around the $1 Mil mark but some sources say its x6 that amount!).
Groupon’s purchase of Twangoo was one of three acquisitions the US company concluded recently. The other two are Indian daily deal site SoSata and Israeli company Grouper. There have been reports that local media giant Naspers also wanted to acquire Twangoo but lost out to Groupon in the end.
Groupon is looking to dominate every market – even our own, by betting that group buying will be huge in South Africa even though retail coupons have never taken off like they did in America.
“œCollective buying is in its infancy in India, Israel and SA but we see strong potential,“ says Groupon president and chief operating officer Rob Solomon in a statement.
The Twangoo acquisition seems to be a talent grab as Groupon looks to setup sales and marketing teams in each country by acquiring clones. The technology that powers Twangoo will no longer be used and the Twangoo website is set to shut down soon. Groupon SA will operate under the “˜MyCityDeal‘ brand which was another Groupon acquisition in Europe.
What does the Groupon/Twangoo acquisition mean for other players in our local (but small) market? Like Ubuntudeal, WiCount, Dealio, OneDayOnly and more niche sites like Saleswine. We suspect that most of the sites that don‘t have any deals on their homepage currently won‘t be around this time next year. Although, the race is not over yet – we have it on good authority that a big local media player will be entering the group buying space pretty soon.
Back to the interview –
We spoke to Twangoo founders and asked them about the Groupon deal – was it a cash and/or stock acquisition, how well Twangoo was doing before, why they don‘t own, what their plans are for mobile seeing as they are in a mobile dominated market and how they approached Groupon to setup the acquisition?
The term Twangoo is slang for “˜Tuangou‘ the Chinese term for group buying. There is even a well established Chinese group buying site called Twangoo –, seems Dan and Wayne named their company after the Chinese leader? Was there anything original about their Twangoo operation? Does it matter? Say what you like – they just made a few million in under a year.
Let‘s call it “˜Right place at the right time‘.
Click play below.

Video edited by Le Roux and Nadine, article contribution by David.

      1. As a regular customer of Twangoo I have only ever received great service and the best deals in Cape Town. Chris M given the owner of a competitor group buying website is a contributor on your blog you sure this is not just a smear campaign or attempt to drive traffic to your blog based on your story appearing to be controversial?? It’s quite clear Twangoo and the owner of the venue you refer to have resolved the issue. The story of their success is great for both us as consumers as we getting the best deals possible now and indeed South Africa in general given the exposure its created for entrepreneurs and technology in SA! Give the guys the credit they deserve and move on.

          1. Sorry I can only disagree. I have nothing against twangoo but what I just read in that imod blog seems true. I did my own research. Just look at the sugar hotel deal.
            People here are obviously either part of some other site or pro twangoo. and the two camps are obviously going against each other. Sorry but I think facts are clearer than words. Twangoo was really lucky and smart and congrats to them for their achievements. On the other hand shame on you for doing what is clearly proven with evidence in the imod article.

          2. We have responded to the issues raised on the IMOD blog directly and continue to meet with the vendors you highlighted to resolve any pricing issues. All vendors sign a legally binding contract with confirmed pricing. If however its proven that the original pricing advertised is different to that on our website we will always reimburse our customers the difference. Given this policy and how we have dealt with past pricing issues like like the ones mentioned on IMOD why would we purposefully inflate pricing if the promise to our customers is to refund the difference if proven?
            We have one simple policy to make both customers and merchants happy and will go out of our way to do so.
            We have many loyal and happy customers and continue to focus and resolve all issues related to our business. As always, feel free to contact us directly on or 021 8122645 should you as a customer or merchant have any concerns or issues.

          3. Awesome – so does that mean you guys are reimbursing people that bought the Sugar Hotel deal, the Caribbean Tan deal, and the Pigalle deal?

          4. As explained previously there have been some pricing issues. We have addressed this directly with the vendor as our editorial team only work off a signed legally binding contract supplied by the vendor. If a pricing issue occurs and can be proven we resolve this matter directly with our respective clients who will receive email notification and confirmation of a refund if applicable. We pride our ability to offer outstanding customer service and we only ever endeavour to make both customers and vendors happy. Our dedicated customer service team are available during normal offices hours should you have any concerns or issues you would like to raise – or 021 8122645

        1. Dude you clearly haven’t read the comments on that post. Twangoo only clarified ONE of the dodgy deals, but there are THREE MORE that commenters pointed out, including one by the SAME VENDOR. Your entire comment sounds like a bad attempt at shilling – poor business ethic should always be called out and spoken about.
          And just to clarify: I’ve bought from Twangoo, and I have no problem with the experience. This is about transparency when it comes to the deals that ALL OF THESE sites put up, not just Twangoo. If I can’t easily quantify the deal, then it is likely a lie. In fact, I’ma start my own deals site and start listing iPod cases that “were R1000, now only R200”. For serious.

  1. There was nothing lucky about it. i worked with the guys for a bit and they put into serious hard graft! They saw it coming.

    1. Yo dude, I’ma let you finish, but first I wanna tell you that LUCK HAS EVERYTHING TO DO WITH IT. Need I remind you that they spent FOUR MONTHS trying to get in to Groupon before that actually came to fruition?

  2. I’m lank confused: why does the anchor about them making a few million in under a year link to Uniforum’s whois tool?

      1. Oh rofl, I was expecting it to go to a post about how much money they made:-P Thanks for the clarification!

  3. Great vid as always guys.
    Well done to Daniel, Wayne and the rest of the team – stories like this warm the cockles of my heart.
    I have met with the chaps a few times and it couldn’t have happened to a nicer and hard working bunch of chaps.
    Luck has ABSOLUTELY nothing to do with it.
    Do you know that when recently Eric (the other half of required asupport the mail came from Daniel – turns out Daniel was doing EVERY support email. That’s ownership.
    Well done chaps. Hard work, good dev, fantastic spotting of an opportunity and great software won the day.

  4. That’s the kind of video production quality that wins awards! did you get a Hollywood sound designer to capture that audio? Top notch!

  5. Ok so on 23rd July 2010 bandwidthblog featured an article about twangoo. You guys posted about them a couple of times. Clearly you have some sort of advertising arrangement with them.
    Now I’m not surprised.

    1. Hi Andy, we wrote about Twangoo initially to review a new local startup – something we always do.
      Then, when they got acquired, I wanted to interview them as it was hot news and would likely bring in decent traffic and discussion to Bwth blog – which it did.
      Thats about it. Speculate as much as you like in the comments and come back regularly. 🙂

      1. We hereby confirm there is NO advertising or other arrangement between ourselves and Charl. We are most appreciative to Charl for the positive exposure he has provided Twangoo.

  6. I think some of these remarks ar e in absolutely poor taste.
    Congrats to 2 fantastic ZA entrepreneurs who deserve praise for building a good business, creating jobs and opportunity and putting their balls on the line. 9/10 businesses fail. This was a great success for SA Entrepreneurship.
    We should be celebrating hard working entrepreneurs and showing a brave face as “the Silicon Cape”.
    When I read comments like this I feel embarrassed to be associated in any way with the writer and moreso I feel terrible for the hard working entrepreneur who has to read such ridiculously out-of-place comments and jibes by people who should spend more time examining why they haven’t achieved this level of success. Spend some time examining yourself.
    Personally I am disgusted.

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