MarketSharing Bets Small Businesses in New York and Beyond Will Clamor for Daily Deals

5/18/11Follow @arleneweintraub

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angle would resonate, Amato says. But he was there for the Dunkin’ Donuts sales call, and he remembers it being a fairly easy pitch. “There’s only so much they can do with the consumer walking in the door,” he says. “They also need to focus on the part of their business that’s about delivering to corporations, and we offered them a way to reach those people.”

MarketSharing raised $1 million in seed funding from K2Media and AppFund in late April, and Amato hopes to secure a Series A in the next 12 months. Amato’s own track record has served him well in the fundraising process so far. While at Show Media—which is best known for placing ads on taxis in NYC—he grew annual revenues to $15 million in less than four years and maintained cash-flow margins of 25 percent or more. “He had an incredible track record at Show Media, which has helped him build a great salesteam at MarketSharing,” says Daniel Klaus, who co-founded AppFund with Kevin Wendle, a co-founder of Fox Broadcasting Company.

Klaus says AppFund invested in MarketSharing knowing full well that competition would be a risk. Rivals include RapidBuyr, Bizy, and OfficeArrow. Will more competitors pop up? “No question,” Klaus says. But he believes there’s room for more than one player in the business-to-business deals space because of the vast purchasing needs of small companies. “A consumer buying a hair-removal coupon from Groupon is not the same as someone who’s growing a small business,” he says.

Amato believes MarketSharing stands out from other B-to-B sites because of its hyper-local approach. “Our model is to position ourselves as local experts,” he says.

No doubt MarketSharing will get some traction in the market for VC money, judging from the funding frenzy that has benefitted many daily-deals sites. Gilt Groupe, which sells high-end fashions and services in limited-time “flash sales,” raised a $138 million Series A in early May. Rival fashion site Ideeli scored a $41 million Series C in April.

And Amato was heartened to see New York-based Lot18—which offers discounts on wine—raising $10 million on May 2. “The total annual spend on wine is $18 billion,” Amato says. “The total annual spend by small businesses is $5 trillion. When you’re targeting that big a space, you’ve got to have a chance of becoming a winner.”

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