Peixe Urbano, the largest Brazilian online daily-deal provider, is loading up on capital, recruiting U.S. engineers and investing in new products to fend off Groupon Inc.’s expansion on its home turf.
Following an investment from Morgan Stanley Investment Management and T. Rowe Price Group Inc. earlier this month, co-founder Alex Tabor is spending this week in California, looking for talented computer scientists interested in moving to Brazil. He’s recruiting at Stanford University, the University of California, Berkeley, and the California Institute of Technology.
Like Groupon in the U.S., Peixe Urbano has grown rapidly in Latin America by hiring salespeople to sign up local merchants willing to offer steep discounts. Founded in 2010, it has more than 1,000 employees and offers deals in over 80 cities in Brazil, Argentina, Mexico and Chile. Unlike in the U.S., Peixe Urbano doesn’t have to contend with established Web companies like Amazon.com Inc. (AMZN), OpenTable Inc. and Yelp Inc. offering competitive products, Tabor said.
“We have virgin terrain,” Tabor, chief technology officer of the Rio de Janeiro-based company, said today in an interview in San Francisco. “We’re able to get a leadership position and maintain it.”
Groupon had the biggest user base in Latin America, with 4.8 million monthly users as of April 2011, followed by Spain’s Groupalia with 2.3 million and Peixe Urbano with 2.1 million, according to ComScore Inc. Tabor said Peixe Urbano’s registered users more than tripled last year to 16 million from 5 million in 2010.
Julie Mossler, a spokeswoman for Chicago-based Groupon, declined to comment on her company’s expansion in Latin America.
‘Aggressive’ Hiring
Tabor wouldn’t provide financials, though he said the company has been “aggressive” with hiring. Groupon was criticized after its initial public offering filing last year showed that it had racked up $540.2 million in operating losses since 2008 from spending on sales and marketing. The company recorded a $10.6 million net loss in the third quarter on revenue of $430 million.
Peixe Urbano said on Jan. 18 that it raised an undisclosed amount of capital in a funding round led by New York-based Morgan Stanley (MS) and Baltimore-based T. Rowe Price to “fuel growth and consolidation” in the region. The company had previously raised money from hedge fund Tiger Global Management LLC and venture-capital firms General Atlantic LLC and Benchmark Capital.
With the new funding, the company is “very well capitalized” and has no immediate plans for an IPO, Tabor said.
Restaurants, Beauty Salons
The Peixe Urbano website and smartphone application offers discounts of more than 50 percent to stores and services, with its biggest markets focused on restaurants, beauty salons and travel. Peixe Urbano plans to add to its product offerings in those areas this year, Tabor said, without providing details.
Through recruiting efforts in California, and soon at East Coast universities including the Massachusetts Institute of Technology, the company is hoping to hire at least three engineers and three business school graduates, Tabor said.
“They get to live in Brazil and learn about the Internet and scalability,” Tabor said. Also helping recruit candidates is the fact that “we have a really strong brand there,” he said.